عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Aramco Shares Influence Saudi Stock Market Index

A view of the board at the Stock Exchange Market (Tadawul) bourse in Riyadh. (Photo by FAYEZ NURELDINE / AFP)
A view of the board at the Stock Exchange Market (Tadawul) bourse in Riyadh. (Photo by FAYEZ NURELDINE / AFP)
TT
TT

Aramco Shares Influence Saudi Stock Market Index

A view of the board at the Stock Exchange Market (Tadawul) bourse in Riyadh. (Photo by FAYEZ NURELDINE / AFP)
A view of the board at the Stock Exchange Market (Tadawul) bourse in Riyadh. (Photo by FAYEZ NURELDINE / AFP)

The shares of Saudi Aramco started influencing the performance of the Saudi stock market index on Wednesday, with trades that are most active in terms of both value and quantity.
 
This comes although the oil giant’s shares fell almost 3 percent on Wednesday as a natural result of investors pocketing profits on the day it was included in the MSCI Emerging Markets Index.
 
Aramco’s share managed - despite the profit-taking operations - to consolidate its valuation, closing at 36.6 riyals ($9.76) on Wednesday. The shares closed Tuesday trading at 37.75 riyals ($10), down 0.25 riyals or 0.66 percent on the day, but the stock remains 18 percent higher than the IPO price of 32 riyals.
 
The Saudi stock market index ended its trading on Wednesday, with an increase of 0.7 percent, to close at 8253 points, 56 points higher, continuing its rise for the fourth session, and recording the highest closing in about 4 months, amid trades totaling about 6.6 billion riyals ($1.76 billion).
 
With the closure of trading on Wednesday, the share of SABIC - one of the largest petrochemical companies in the world - rose by more than one percent, to end its trading at 91.5 riyals ($24.4). This was seen as a reaction to the company’s board of directors recommendation to distribute cash dividends to shareholders by 2.2 riyals for the second half of 2019.
 
Earlier this month, Tadawul updated its index methodology to develop and manage its equity indices in a more balanced way.

The measures include a 15 percent threshold to reduce the dominance of larger companies on the index performance so that weights of all index constituents remain under a set capping threshold, Tadawul announced in a statement.
 
The exchange is also applying a new rule for “Fast Entry”, in which shares of significantly large IPOs are included in the Tadawul All Share Index at the close of their fifth trading day.

Most Viewed

 
 
Business

ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
TT
TT

ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.