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Saudi Stocks Stable despite Decline in Oil Prices

Saudi Arabia's stock closed at a limited decline of 1.3 percent ahead of the Eid al-Adha holiday. (AFP)
Saudi Arabia's stock closed at a limited decline of 1.3 percent ahead of the Eid al-Adha holiday. (AFP)
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Saudi Stocks Stable despite Decline in Oil Prices

Saudi Arabia's stock closed at a limited decline of 1.3 percent ahead of the Eid al-Adha holiday. (AFP)
Saudi Arabia's stock closed at a limited decline of 1.3 percent ahead of the Eid al-Adha holiday. (AFP)

Last week's oil prices saw a drop of up to 10 percent, as Saudi Arabia's stock closed at a limited decline of 1.3 percent ahead of the Eid al-Adha holiday.

Despite sharp declines in oil prices, the Saudi stock remained strong due to several reasons, most notably the remarkable flow of cash of foreign investment in Saudi companies listed in the local market, which pushed foreign investors' ownership rates to achieve new records on a weekly basis.

So far, 162 companies listed in the Saudi stock market have announced their financial results for the first half of 2019. Compared to same period of 2018, 83 companies reported a positive improvement, while 79 announced a drop in profits and 39 reported losses.

Listed companies continue to announce their financial results for Q2 of 2019, and the rest of the companies are expected to announce their financial results after the Eid holiday. The deadline for announcing results ends on August 21.

The Saudi index dropped 1.3 percent during last week's trading to close at 8,550 points.

Market trading is expected to resume its activity on August 18 after the Eid holiday, which starts on Sunday.

As of Thursday's closing time, the Saudi stock revenues since the beginning of the year were around 9.24 percent, which is good compared to the performance of the global financial markets in the past few weeks, which witnessed a wave of declines.

The value of public and private assets of investment funds in Saudi Arabia registered a new leap during Q2 2019, amounting to $86.1 billion, compared to $82.6 billion in Q1 of the same year.

According to Saudi Capital Markets Authority (CMA), the value of public and private fund assets jumped 4.1 percent in the Q2 2019. The value of the private investment funds assets grew by 3.5 percent and the value of public fund assets grew by 5.3 percent.

The value of the assets of private investment funds amounted to $52.5 billion at the end of Q2 2019 compared with $50.6 billion in the first quarter.

Meanwhile, the value of assets of public investment funds amounted to $33.6 billion by the end of Q2 2019 compared with $31.9 billion in Q1 2019.

According to the CMA, the investment fund includes a set of securities that are selected according to specific criteria that meet the objectives of the investment funds, including the public and special funds.

Profits of the investment funds come usually from capital gains, which are the profits resulting from the improvement or change in the prices of the securities invested in addition to dividend profits, if any, for securities.

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Business

Kingdom Holding-PIF Partnership Soars to $6.83 Billion on SpaceX Stake

SpaceX employees celebrate the close of the company’s initial public offering on the Nasdaq Stock Market in New York City. (Getty Images/AFP)
SpaceX employees celebrate the close of the company’s initial public offering on the Nasdaq Stock Market in New York City. (Getty Images/AFP)
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Kingdom Holding-PIF Partnership Soars to $6.83 Billion on SpaceX Stake

SpaceX employees celebrate the close of the company’s initial public offering on the Nasdaq Stock Market in New York City. (Getty Images/AFP)
SpaceX employees celebrate the close of the company’s initial public offering on the Nasdaq Stock Market in New York City. (Getty Images/AFP)

Saudi Arabia’s Kingdom Holding Company said the fair value of its stake in SpaceX has reached $6.83 billion, marking what the company described as a major milestone for its long-term investment strategy and its partnership with the Saudi Public Investment Fund (PIF), which owns a 16.87 percent stake in Kingdom Holding.

The valuation reflects an increase of more than $2.3 billion from the previous carrying value of $4.47 billion, said Kingdom Holding. The announcement immediately boosted investor sentiment on the Saudi stock market, sending the company’s shares up nearly 4 percent.

Kingdom Holding said it owns more than 42.4 million Class A shares in SpaceX. Based on the share price cited in the company’s disclosure, the value of that holding rose to approximately SAR 25.6 billion ($6.83 billion).

Long-term investment strategy

Mohammed Al-Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that Kingdom Holding’s decision to retain its investments in X and convert its shares, alongside developments related to SpaceX, demonstrates a more mature investment philosophy.

The strategy reflects a focus on long-term ownership of “transformational assets” capable of generating substantial future value rather than pursuing short-term gains, he added.

Such an approach, he explained, aligns closely with the objectives of Saudi Vision 2030, which seeks to strengthen the Kingdom’s presence in advanced technology sectors worldwide.

Financial and economic adviser Dr. Hussein Al-Attas echoed that view, arguing that the figures disclosed by Kingdom Holding illustrate how Saudi capital has evolved from a passive source of funding into an active strategic partner in emerging industries, including space-related technologies.

Al-Attas told Asharq Al-Awsat that PIF’s position as a major shareholder has given Kingdom Holding greater financial flexibility and the ability to withstand volatility in the technology sector, enabling it to pursue a more institutional and long-term investment model.

Balancing growth and stability

Al-Farraj noted that Kingdom Holding’s portfolio combines traditional assets, such as hotels and real estate, with high-growth technology investments.

In an environment of elevated global interest rates, the steady cash flow generated by traditional assets provides an important cushion against risk, he remarked.

Large-scale technology projects often require years of heavy capital spending before realizing their full economic potential, he noted. Stable, income-generating assets therefore help preserve liquidity while allowing investors to maintain exposure to higher-risk, higher-growth opportunities.

Al-Attas stressed that this balanced approach mirrors the strategies employed by many leading global investment firms, reducing dependence on any single sector while preserving long-term growth potential.

Gulf capital gains strategic influence

Al-Farraj said Gulf sovereign wealth funds have become particularly attractive partners for major technology companies because they offer three advantages: substantial liquidity, long investment horizons, and a willingness to tolerate cyclical volatility.

Beyond financing, Gulf investors provide access to rapidly expanding markets and opportunities in telecommunications, artificial intelligence, digital infrastructure, and energy, he stated. As a result, they increasingly serve as strategic partners rather than simply providers of capital.

Both experts stressed that lofty valuations for companies, such as SpaceX, reflect a combination of operational achievements and strong expectations for future growth.

While the potential rewards remain significant, they cautioned that such investments also carry considerable financial and execution risks if anticipated growth fails to materialize.

Business

Gold Extends Gains After US, Iran Reach Peace Deal

Gold bars of various values are stored in a safe deposit room in Munich, Germany, January 28, 2026. (Reuters)
Gold bars of various values are stored in a safe deposit room in Munich, Germany, January 28, 2026. (Reuters)
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Gold Extends Gains After US, Iran Reach Peace Deal

Gold bars of various values are stored in a safe deposit room in Munich, Germany, January 28, 2026. (Reuters)
Gold bars of various values are stored in a safe deposit room in Munich, Germany, January 28, 2026. (Reuters)

Gold rose more than 2% on Monday after US and Iran officials said they had reached an initial agreement to end their war, pushing oil prices lower and easing concerns about inflation and higher interest rates.

Spot gold climbed 2.5% to $4,322.87 per ounce by 0312 GMT, hitting its highest level since June 9 and extending gains for a third straight session. US gold futures ‌for August delivery ‌rose 2.5% to $4,344.80.

US and Iranian officials said on ‌Sunday ⁠they had agreed ⁠on a framework to end their war, halt the US blockade of Iran and reopen the Strait of Hormuz.

The pact will be officially signed on Friday in Switzerland, Pakistani Prime Minister Shehbaz Sharif said in a post on X.

The US dollar fell to a 10-day low, making greenback-priced bullion cheaper for other currency holders, while oil prices slipped more than 4%.

"Lower ⁠oil prices and a softer dollar, stemming from ‌reduced geopolitical risk and the anticipated reopening ‌of the Strait of Hormuz, are helping to calm inflation expectations," said Tim Waterer, ‌chief market analyst at KCM Trade.

"This combination is providing the ‌precious metal with its best tailwind in recent weeks, though sustainability will depend on how durable the peace agreement proves to be."

Gold prices have fallen about 20% since the start of the US-Israeli war against Iran in late February. The ‌effective closure of the Strait of Hormuz has led to a sharp increase in global oil prices, stoking ⁠inflation concerns ⁠and raising expectations of interest rates staying higher for longer.

Bullion loses appeal in a high-interest-rate environment as it is a non-yielding asset.

Markets have scaled back expectations for a US rate hike in December to 48% after the peace deal, down from 69% last week, according to the CME FedWatch tool.

Investors now await the Federal Reserve policy decision and remarks, the first under Chair Kevin Warsh, on Wednesday, with rates widely expected to remain unchanged.

"Currency debasement concerns, fiscal risks and ongoing geopolitical fragmentation continue to underpin long-term demand (for gold). A moderation in energy-led inflation could help these themes regain traction," OCBC said in a note.

Spot silver rose 3.6% to $70.39 per ounce, platinum gained 3.3% to $1,773.70 and palladium climbed 3.3% to $1,324.75.

Business

Oil Slips $4 as US, Iran Reach Peace Deal to Reopen Strait of Hormuz

A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US, February 18, 2025. (Reuters)
A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US, February 18, 2025. (Reuters)
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Oil Slips $4 as US, Iran Reach Peace Deal to Reopen Strait of Hormuz

A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US, February 18, 2025. (Reuters)
A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US, February 18, 2025. (Reuters)

Oil prices slipped to their lowest since March on Monday after US President Donald Trump and Iran's deputy foreign minister said they had reached an initial deal to end the war and to resume traffic through the Strait of Hormuz.

Brent crude futures fell $4.08, or 4.7%, to $83.25 a barrel by 0415 GMT and US West Texas Intermediate was at $80.53, down $4.35, or 5.1%. Both contracts fell to their lowest levels since March 10 on Monday after tumbling more than 3% on Friday.

The US and Iran ‌will sign a ‌memorandum of understanding in Switzerland on Friday, said the prime ‌minister ⁠of Pakistan, whose country ⁠has served as a mediator. Trump said on Sunday that the Strait of Hormuz would be open "toll free" and that a US naval blockade of Iranian ports would also end.

Iran's semi-official Mehr news agency said the draft deal called for reopening the Strait of Hormuz within 30 days under Iranian arrangements.

"The geopolitical risk premium that had been built into crude is now being unwound quite aggressively as traders price in the prospect of restored oil ⁠flows," said Tim Waterer, chief market analyst at KCM Trade.

The ‌world has lost millions of barrels of oil ‌and gas supply since the war closed the Strait of Hormuz, a chokepoint for a fifth of ‌the world's oil and liquefied natural gas supplies, for more than three months.

Investors ‌are also watching cautiously how quickly Middle Eastern producers can resume oil production and exports following damage from the war and whether more ships will enter the region.

"While these uncertainties suggest upside risks to our forecast for Brent oil futures to reach $80/bbl by the end of the year, it's worth ‌noting that oil flows through the Strait of Hormuz just needs to reach 60-70% of pre-war levels to return oil markets ⁠to pre-war oversupply ⁠expectations," Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia, said in a note.

Iran's deputy foreign minister, Kazem Gharibabadi, said a more expansive agreement would be negotiated during a 60-day ceasefire period.

E4 nations, which include the UK, France, Germany and Italy, said on Sunday the countries were prepared to lift sanctions on Iran in response to steps on its nuclear program.

"Beyond the immediate price reaction, attention will now shift toward the pace of actual supply normalization and compliance with the agreement," said Priyanka Sachdeva, senior market analyst at Phillip Nova.

"While the conflict may have come to an end and oil flows through the Strait of Hormuz may gradually return to normal, the damage already done cannot be reversed overnight. This includes not only any physical damage to oil infrastructure but also the economic strain endured by oil importing economies that have faced elevated energy costs for months."