In a recent report, Al-Rajhi Capital revealed its expectations for the consolidation of the Saudi stock index during at least the coming period, which extends from 3 to 6 months, despite the sharp correction in the stock markets and the correction of valuations below average levels.
Al-Rajhi Capital expected a modest rise in the second half of 2023, led by the banking and petrochemical sectors.
Al-Rajhi Capital said that 8 companies are considered their favorites in the Saudi stock market, which are: Al-Khorayef, Tawuniya, Bawan, Tanmia, Al-Hammadi, Yamama Cement, Mobily and Sipchem.
Head of Research at Al Rajhi Capital, Mazen Al-Sudairy
For his part, the head of research at Al-Rajhi Capital, Mazen Al-Sudairy, said that the markets fell yesterday with the continued emphasis of the Federal Reserve on monitoring inflation and that it will not tolerate it, as well as with the influence of the situation in China and the slowdown in industrial indicators, which was reflected in oil prices and thus reflected in the performance of the Saudi market. .
Mazen Al-Sudairy added, in an interview with Al-Arabiya, today, Thursday, that the significant rise in the interest rate during last September was accompanied by a strong correction in the Saudi market.
Al-Sudairy explained that the Fed mentioned yesterday that it will raise the interest rate twice by 25 points and then assess the situation, and therefore it is too early to talk about the possibility of a decline in the interest rate, or that the period of increasing interest rates will be short, and may even extend to two years.
The head of research at Al-Rajhi Capital indicated that the Saudi budget in 2023 was set on the basis of the oil price at $78 a barrel, compared to Al-Rajhi Capital’s expectations of between $80 and $85 a barrel.
Mazen Al-Sudairi said that there is a problem represented in the lack of oil supply, which was shown by the recent “OPEC” report, with the presence of production problems in Angola, sanctions on Russia’s oil, the failure of Iran’s oil to return to the market, and the shift of US stocks to purchase, and these are good factors that support prices.
He added that the fluctuation in oil prices was expected with a correction at the price of $85 per barrel, and therefore oil prices and interest are the two biggest influencers in the Saudi market.
Al-Sudairy explained that good oil prices raise the reserves of the Saudi Central Bank and thus enhance its role in lending to Saudi banks.
