The Saudi stock market index closed lower at 10,392 points

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The main Saudi stock index closed today, down by 47.67 points, reaching the level of 10,392.97 points, with trades worth 4.6 billion riyals.

The volume of shares traded amounted to 219 million shares, with the shares of 109 companies recording an increase in value, while the shares of 149 companies declined.

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The shares of the companies "Raydan", "Naseej", "Raoum", "DBS", and "Tas'heel" increased the most, while the shares of the companies "Chemanol", "Tabuk Agricultural", "Armah", "Sadq", and "Knowledge City" were the lowest in trading, and the rates of increase and decrease ranged between 7.75% and 9.49%.

Regarding activity, the shares of the companies “Al-Ahly”, “Al-Kathiri”, “Ldon”, “Saudi Aramco”, and “Americana” were the most active in quantity, while the shares of the companies “Al-Ahly”, “Al-Rajhi”, “Saudi Aramco”, “STC”, and “SABIC Agricultural Nutrients” were the most active in value.

The Saudi parallel stock index, “Nomu,” closed today, down by 234.45 points, reaching the level of 21,072.88 points, with trades worth 18 million riyals, and the quantity of shares traded reached more than two million shares.

Hamad Al-Olayan, a financial markets analyst, said that determining whether the market has reached the bottom or whether the current timing represents an appropriate opportunity to buy requires focusing on the fundamentals of companies, noting that the messages sent by the Capital Market Authority focus primarily on protecting the investor, raising the level of transparency, and enhancing confidence in the market.

Al-Olayan added, in an interview with Al Arabiya Business, that the regulatory movements that the market witnessed during the last period reflect a shift in the regulations and regulations that support these goals, but the biggest challenge remains linked to the results and performance of companies, which is something that falls outside the scope of the legislative and regulatory role of the Authority, whose role is focused on enhancing transparency and governance.

He pointed out that the results of the second quarter represent an important indicator of companies’ performance under the current circumstances, while awaiting the results of the third and fourth quarters, explaining that the impact of the current challenges varies from one sector to another.

Olayan explained that sectors, led by the banking sector and some other sectors, may benefit from the current challenges, while other sectors face clear pressures as a result of rising supply chain costs and interest rates, in addition to increasing competition from investment instruments with high returns.

He pointed out that 10-year bond yields are about 5.3%, a level that has not been recorded since 2002, considering that the high returns and financing costs represent a challenge for a number of sectors, including the retail sector and other sectors affected by the high cost of financing.

On the other hand, Al-Olayan believes that the energy sector represents an important opportunity for the Kingdom in light of the current challenges, pointing to the Kingdom’s ability to return to the market and sell within a short period, and to benefit from the rise in oil prices, which may reflect positively on Aramco’s performance and results during the next two quarters.

He explained that most investors rely on Aramco’s results to evaluate the mechanism of distributions and returns, given that the market relies mainly on cash distributions and investment returns.

Al-Olayan pointed out that stocks face high competition from multiple investment tools, not just bonds and sukuks, at a time when other investment tools offer good returns and provide the investor with higher levels of safety.

He also pointed out the high cost of borrowing, explaining that funds that were available at a low cost during the years 2020, 2021 and even 2022 have today become significantly more expensive, which represents one of the most prominent challenges facing companies and investors.

However, Olayan expected great opportunities to emerge in the stock market during the coming period, especially in specific sectors and stocks, stressing the importance of selecting companies accurately and focusing on the company’s performance and financial positions rather than looking at the sector in general only.

He stressed that investors can rely on the strength of companies’ performance and financial positions in making their decisions during the coming short period, expressing his optimism about the future of the market in light of the current transformations and movement witnessed in the financial market.