Saudi Stocks: Predictions to Overcome Level of 8000 Points

Man monitoring Saudi Arabia stocks (File photo: Reuters)
Man monitoring Saudi Arabia stocks (File photo: Reuters)
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Saudi Stocks: Predictions to Overcome Level of 8000 Points

Man monitoring Saudi Arabia stocks (File photo: Reuters)
Man monitoring Saudi Arabia stocks (File photo: Reuters)

The Saudi market starts the new week’s trading amid traders’ optimism that the index will be capable of reversing its negative track recorded over the past four weeks and exceed the levels of 8000 points.

The drop in the stock was accompanied by profit-taking operations for many listed companies which achieved noticeable gains in January.

Traders expect more than 155 companies to announce their financial results for the last quarter of 2019 in the coming weeks.

During the first nine months of 2019, net profits of the Saudi companies listed in the Saudi stock market, excluding Saudi Aramco, amounted to about $17.2 billion.

The results of the final quarter of 2019 are expected to achieve unprecedented results in the Saudi stock market, driven by the profits that Saudi Aramco is expected to announce.

Oil prices recorded a 7 percent increase compared to the previous week’s closing, with Brent oil jumping above $57 a barrel and crude oil settling above $52.

On Friday, oil prices recorded their highest levels in about two weeks ago.

Saudi market traders hope that this positive performance will be reflected in the Saudi stock market this week, at a time when most listed companies are still preparing to announce their financial results in the next few weeks.

The Saudi index ended the trading of the last week down by 2.2 percent, closing at 7874 points, compared to the previous week’s closing at 8053 points, continuing its decline for the fourth week in a row.

All the listed sectors recorded a decline during the last week's transactions, except for the media and entertainment sector which rose 2.1 percent, while the shares of 38 companies listed closed on code ‘green’.



Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
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Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk

Oil prices rose by around 1% on Friday as investors weighed a tight prompt market against a potential large surplus this year forecast by the IEA, while US tariffs and possible further sanctions on Russia were also in focus.

Brent crude futures were up 76 cents, or 1.11%, at $69.40 a barrel as of 1153 GMT US West Texas Intermediate crude ticked up 82 cents, or 1.23%, to $67.39 a barrel.

At those levels, Brent was headed for a 1.6% gain on the week, while WTI was up around 0.6% from last week's close.

The IEA said on Friday the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation, Reuters reported.

Front-month September Brent contracts were trading at a $1.11 premium to October futures at 1153 GMT.

"Civilians, be they in the air or on the road, are showing a healthy willingness to travel," PVM analyst John Evans said in a note on Friday.

Prompt tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.

"OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank analysts said in a note.

Further adding support to the short-term outlook, Russian deputy prime minister Alexander Novak said on Friday that Russia will compensate for overproduction against its OPEC+ quota this year in August-September.

"Prices have recouped some of this decline after President Trump said he plans to make a 'major' statement on Russia on Monday. This could leave the market nervous over the potential for further sanctions on Russia," ING analysts wrote in a client note.

Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress on peace with Ukraine and Russia's intensifying bombardment of Ukrainian cities.

The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package, but Russia said it has "good experience" of tackling and minimising such challenges.