Saudi Stocks Overcome ‘Aramco Test’ Pressure

A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019.  (Reuters)
A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. (Reuters)
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Saudi Stocks Overcome ‘Aramco Test’ Pressure

A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019.  (Reuters)
A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. (Reuters)

The Saudi stock market index achieve gains of 2.4 percent in the past two days, recovering from Sunday’s drop of 1.99 percent in wake of Saudi Aramco’s announcement that the company will launch its initial public offering (IPO) on the Saudi Stock Exchange (Tadawul).

The stock market index had closed at 7,744 points on Thursday, while it closed at 7,782 points on Tuesday, recovering from the Aramco announcement.

The impact of the move still lingers on the monetary liquidity into the trading of the daily shares market.

This is not expected to have a negative effect because the traded liquidity volume has risen during the past two days compared to Thursday and Sunday.

The traded liquidity saw an increase of around SAR600 million (USD600 million) compared to Sunday.

This indicates that trading in the Saudi stock market is returning to normal, while investors anticipate the announcement of the biggest IPO.

Aramco listing in the local stock market is expected to boost the attractiveness and competitiveness of the capital market.

The stock market index closed on Tuesday with gains of around 129 points, a rise of 1.69 percent.

These gains would be added to Monday’s gains of around 0.8 percent while the traded monetary liquidity saw a remarkable rise in the past two days to reach SAR2.6 billion (USD712 million) compared to around SAR2.1 billion (USD560 million) on Sunday.



Oil Prices Ease but Remain Near 2-week Highs on Russia, Iran Tensions

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
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Oil Prices Ease but Remain Near 2-week Highs on Russia, Iran Tensions

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo

Oil prices retreated on Monday following 6% gains last week, but remained near two-week highs as geopolitical tensions grew between Western powers and major oil producers Russia and Iran, raising risks of supply disruption.
Brent crude futures slipped 26 cents, or 0.35%, to $74.91 a barrel by 0440 GMT, while US West Texas Intermediate crude futures were at $70.97 a barrel, down 27 cents, or 0.38%.
Both contracts last week notched their biggest weekly gains since late September to reach their highest settlement levels since Nov. 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and UK following strikes by Kyiv on Russia using US and British weapons.
"Oil prices are starting the new week with some slight cool-off as market participants await more cues from geopolitical developments and the Fed’s policy outlook to set the tone," said Yeap Jun Rong, market strategist at IG.
"Tensions between Ukraine and Russia have edged up a notch lately, leading to some pricing for the risks of a wider escalation potentially impacting oil supplies."
As both Ukraine and Russia vie to gain some leverage ahead of any upcoming negotiations under a Trump administration, the tensions may likely persist into the year-end, keeping Brent prices supported around $70-$80, Yeap added.
In addition, Iran reacted to a resolution passed by the UN nuclear watchdog on Thursday by ordering measures such as activating various new and advanced centrifuges used in enriching uranium.
"The IAEA censure and Iran’s response heightens the likelihood that Trump will look to enforce sanctions against Iran’s oil exports when he comes into power," Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia said in a note.
Enforced sanctions could sideline about 1 million barrels per day of Iran’s oil exports, about 1% of global oil supply, he said.
The Iranian foreign ministry said on Sunday that it will hold talks about its disputed nuclear program with three European powers on Nov. 29.
"Markets are concerned not only about damage to oil ports and infrastructure, but also the possibility of war contagion and involvement of more countries," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Investors were also focused on rising crude oil demand at China and India, the world's top and third-largest importers, respectively.
China's crude imports rebounded in November as lower prices drew stockpiling demand while Indian refiners increased crude throughput by 3% on year to 5.04 million bpd in October, buoyed by fuel exports.
For the week, traders will be eyeing US personal consumption expenditures (PCE) data, due on Wednesday, as that will likely inform the Federal Reserve’s policy meeting scheduled for Dec. 17-18, Sachdeva said.