Tadawul posts record six-year high
The Tadawul General Index rose by 0.48 per cent on Sunday, August 17, to a six-and-a-half-year high of 10,639.04 points.
Saudi Arabia’s stock market has witnessed growth in 13 out of the last 15 sessions, since the decision was made to allow foreigners to invest on the $550 billion-valued bourse.
Of the 20 largest listed Saudi companies, 14 gained on Sunday, including SABIC; the Gulf’s highest valued stock. The petrochemical giant, which is currently trading at 13 times the projected yearly earnings, grew by 0.3 points on Sunday. Moreover, the company, who is expected to be one of the first to encourage foreign ownership, is also set to spearhead Tadawul if the Morgan Stanley Capitals International (MSCI) grants Saudi Arabia an ’emerging market’ status, experts say.
There was much speculation as to the effect the new reforms would have on other GCC markets. While it will undoubtedly attract more attention to the Mena region, a report by AMEInfo last week claimed that investment managers would redirect cash flow from the UAE to the larger, less volatile Saudi market.
If the past few weeks are any indication, this may well prove to be the case. Tadawul is experiencing a six-year high, whereas very low trade volumes and sluggish turnover have defined August at the Dubai Financial Market (DFM); a sharp contrast to recent months.