Analysts: Stability of the local market is an evidence of the Saudi financial market strength after collapse of Chinese market

In the wake of the collapse of the Chinese market and the impact of the euro region due to the problem of Greece, and fears of global financial markets from a global economic catastrophe after a painful blow to the second largest economy in the world, the Saudi capital market remains positive with change rate of 2.47%,

 Experts expect that; Saudi financial market stability despite influence of global markets is a sufficient evidence on the local market power; which will make global eyes focus on it to invest in, also they argued at the same time that it is difficult to judge the end of the losses in the Chinese market, which rebounded on Thursday, rising nearly six percent after the Beijing attempts succeed to stop declines that rocked global financial markets Finally, the strongest step yet to support the market was that Chinese Market Authority banned sailing on the shareholders of large stakes owners in listed companies. Separately, the central bank said it would allow banks to extend loans supported by shares.

Initially Talaat Hafez the financial expert and general secretary of the Committee of Information and banking awareness at Arabic banks has affirmed to »Al Youm» that the Chinese economy is one of the largest economies in the world which is growing at 10% annually, as it owns a lot of resources and its foreign investment outside  China reaches up to trillion dollars, which is one of the largest states in the volume of foreign investments, and this reassure the return of the Chinese financial market and it is known that the occurrence of any collapse or a setback or terminal decline in the Chinese financial market will impact on the economy of the world and thus affect the Saudi economy in the financial and banking sectors, indicating the return of the Chinese economy soon and the Chinese government will take procedures for the return of the Chinese market to what it was.

Hafiz said that the Saudi economy is robust economy which has grown in the past year to 3.5% from 5% in previous years, due to the decline in oil prices and he expected that Saudi Arabia's economy will not affected directly due to the decline in the Chinese capital market, it is possible that the Saudi financial market may be affected by the crisis; because of psychological effect not real, because of the lack of Chinese companies in the Saudi capital market affect directly on the local market, with regard to the existence of a large commercial exchanges between the two countries Hafiz stressed that exports and imports won't be affected between Saudi Arabia and China with regard to trade between the two countries.

Hafiz said that the Saudi banking market will not be affected by the crisis; as it adopts in first priority on the employment of capital, deposits and investments inside the country, which exceeded 2 trillion in the second half of this year and the distribution of investment in the trading in banking market in the Saudi market inside the country on the outside account, noting that foreign assets are not great in number compared to the domestic assets in Saudi banks.

According to an analyst at the financial market Mohammed Bin Ali Al-Rajhi: the Chinese market collapse has no link to the Saudi financial market, but the negative consequences will be limited to the Chinese market, stressing that in the event that the sudden descent is associated with negative consequences for Chinese companies, will have an impact on the local market, and in If there is no justification in the Chinese capital market decline, there will not be any damage to the global and local stocks market.

And Al-Rajhi clarified that the financial market will see a coherent tends to rise, and the most likely cause of decreasing stocks value in the previous period was not because of the Greek crisis or a global crisis, as some believe, but before the Greek crisis, as some thought that the entry of foreign investors will create a positive backlash but the fact came unlike forecast which contributed to successive declines in the past period.

Most Gulf Stock markets rise supported by the oil and the stability of Saudi market

Most Gulf stock markets rose Wednesday following the rise in oil prices, but gains came limited, due to the approach of the month of Ramadan, which usually witnessing a sharp decline in market activity.

The main index of the Saudi market closed almost stable amid variation in the stock at 9543 points. And shares of "Development Bank" and "the Saudi Basic Industries Corporation" (SABIC) decreased by 0.3 percent each, and were the most actively traded in the market.

 In spite of this, "Al Rajhi Bank" increased, which may benefit from the anticipated increase in US interest rates later this year by 1.2 percent, with waiting of investors for a statement of "Federal Reserve Board" (US central bank) later today, after meeting of The Monetary Policy Committee of the Bank. Linking the Saudi riyal to the US dollar means that the Kingdom will follow the footsteps of raising interest rates in the United States, as it does not generate a significant portion of bank deposits in the Saudi interest, therefore, raising interest rates will boost margins of banks' profits, and may also lead to a slowdown in lending growth, what drives investors to buy shares of banks with a high degree of selectivity.

Modest trading volumes over the three days after the opening of the Saudi stock market to foreign direct investment this week show slowdown of foreign to purchase the shares.

 In Dubai, the Dubai market index rose 0.2 percent to 4088 points, and "Dubai parks and resorts" shares record up of about five percent to 1.26 dirhams before trimming its gains to 1.7 percent, and the stock represented about a third of trading value in the market.

"Amlak for Finance" shares decreased by 5.5 percent, and "central" occupied the second place among the most actively traded stock in Dubai, speculators aimed at this share since the resumption of its trading in this month after a hiatus of six years, during which the company restructured its debt.

 General Index of Abu Dhabi Market rose 0.8 percent to 4580 points, with rise of most of the stock. "Etisalat" share increased by 0.9 percent while "First Gulf Bank," increased by 1.7 percent.

Qatar's index rose by 0.1 percent to 11 884 points, with rise of "Qatar Industries" share by one percent. Crude "Brent" rose about a dollar today in light of strong demand from the United States, what positively affect the company's activities in the field of petrochemicals.

The main index of the Egyptian stock exchange closed slightly rise by 0.01 percent to 8557 points. The "International Commercial Bank" share decreased by 0.6 percent to 57.95 Egyptian pounds.

 In the rest of the Gulf indicators, Kuwait's index rose 0.1 percent to 6267 points, while the stock index in the Sultanate of Oman decreased 0.4 percent to 6469 points, while Bahrain's index rose 0.2 percent to 1367 points.

Saudi Arabia's Stock Market declines despite the rise in oil prices with fears related to Yemen

 Saudi Arabia's Stock Market fell in early trade on Wednesday, despite the rise in oil prices after the Yemeni Houthis attacked city in the Kingdom for the first time.

The main index of the Saudi market fell 0.1 percent with drop of two leading shares: Saudi Basic Industries Corporation (SABIC) and Saudi Telecom 0.9 and 2.8 percent respectively.

Houthi fighters launched an attack with mortars and rockets on Saudi border city on Tuesday for the first time since the start of the military campaign led by the Kingdom against them in late March.

The attack came after a statement from Riyadh to ensure that Saudi Arabia was considering a cease-fire to allow humanitarian assistance and call from Yemeni President Abed Rabbo Mansour Hadi from his exile in Saudi Arabia for talks between the political factions in Yemen.

And Saudi Capital Market Authority announced this week to proceed with the imposition of strict rules on direct foreign investment in the stock market and perhaps that disappointed investors who had hoped to see the huge flows at the opening of the market before the first wave of foreign funds next month.

 Egypt Stock Exchange turned its ascending course in the opening minutes of transactions on Wednesday to decline amid selling processes by local individuals for profit-taking after a strong ascending during the previous two sessions.

The main index fell 0.44 percent to reach to 8789.2 points and the secondary index 0.11 percent to reach to 473.3 points.

The turnover values reached to 118.945 million pounds.

Arab and foreign transactions tended to purchase while the Egyptians transactions tended to sales and institutions accounted for 22 percent of transactions so far.

Orascom Telecom lost 2.1 percent, Palm Hills lost 1.4 percent, Talaat Moustafa Group lost0.5 percent, Global Telecom lost one percent whilecastle lost 1.3 percent.

Saudi Stock Market plans to organize promotional meetings with foreign investors

Executive officials in the Saudi Stock Market said on Tuesday that the bourse plans to organize promotional meetings with foreign investors in the last quarter of this year with the opening of the market to direct foreign investment.

The Capital Market Authority announced last week that the market is currently worth 554 billion $, will open its door to direct foreign investment in June 15. Final rules that covers the opening of the market are scheduled to be issued on the fourth of May.

«Khaled Al-Rabiah» Chairman of trading management of "Tadawl" said during a press conference that the promotional tour will focus on North America and Europe.

«Khaled Alhussan» general manager of market management in "Tadawl" said that among those who will participate in promotional tours are investment companies and listed companies, but "Tadawl" will lead the process.

« Alhussan » pointed that the company will launch a new trading system «X-Stream INET» system which is applied in NASDAQ bourse under the plan for the development of systems, probably by the third quarter of the year, although this comes in conjunction with the entry of foreign investors to the market.

He told Reuters on the sidelines of a press conference «We got a very advanced stages in this regard ... expect the third quarter to be the right time to launch it».

On the other hand, «Al-Rabiah» told Reuters on the sidelines of the conference that "Tadawl" has spent more than 250 million riyals to strengthen its infrastructure during the past two years and it intends to use part of the available liquidity to it that is more than three billion riyals to improve services, systems and infrastructure in the next three years to the five.

Initial public offering is not a priority now

«Adel Ghamdi» chief executive officer of "Tadawl" said in last May that the market is looking to do the initial public offering and will use a financial advisor for this purpose soon.

However, «Al-Rabiah» said in Tuesday that the Public Investment Fund, which owns "Tadawl" has the first and the last opinion on subtraction adding that the subtraction procedure has not yet begun.

He continued saying that the company is currently focusing on improving its services and diversifying sources of income and its owners will look at this issue « when "Tadawl" possess enough cash flow to achieve continuity»

«Al-Rabiah» told Reuters on the sidelines of the conference that it is unlikely to implement the IPO this year because the company has other priorities on top of it opening the market to foreigners and investment in the modernization of systems and infrastructure, he said, «it is difficult to determine the time frame for the launch ... There are a lot of priorities at a time quo and must deal with it in the form that serves the public interest, and then look at the other things », adding:« I think in view of the priorities and on top of them is direct foreign investment and investment in the modernization of our systems ... (IPO) won't be this year because we are busy with a lot of other things».

On the other hand «Al-Rabiah» said that "Tadawl" holds continuously meetings with Saudi companies for listing on the stock market, but those companies will take time in making its decision about the new insertions and what arrangements need to be done but their aware increase about the importance of the insertion or at least separate management from property.

He said "Tadawl" held meetings during the past two years with more than 250 interested companies for listing on the stock exchange. There are about 170 companies currently listed on the stock exchange.

Saudi Arabia announces opening the field of investment in Stock Market to foreigners.

The Capital Market Authority Council in Saudi Arabia announced that the timetable for the implementation of the Cabinet decision to open the field for foreign financial institutions to buy and sell stocks listed in the Saudi Stock Market.

 

It was allowed until now only for companies registered in Saudi Arabia or in other Gulf Cooperation Council countries to buy and sell in the Saudi market, and it was must for foreigners to pass through investment funds in Saudi Arabia or the Gulf Cooperation Council (GCC).

The Capital Market Authority in Saudi Arabia explained in a statement on the trading site, it is allowed for qualified foreign investors to invest in listed shares as of the date (28/08/1436 H corresponding to 06/15/2015 AD), noting that it will adopt the final version of the rules and will be published on (15/07/1436 H), and that the rules will be in force from the date (14/08/1436 H corresponding to 01/06/2015 AD). "

The Commission said in its statement that "the schedule came after the publication of the regulations draft on its website to solicit the views and observations of interested persons for a period of 90 days," referring to the desire of the body in putting necessary acts to receive the registration of foreign financial institutions requests as qualified foreign investors and handling with them based on the rules, the Saudi bourse consists of 162 company.

Oil price recovery supports Saudi stock Market and variations in other gulf markets

Saudi stock rose on Wednesday, supported by the rise of oil prices, which changed its direction in the middle of the day in addition to the positive news from the companies, while new plans for the establishment of Dubai Parks paid market to rise. And variations in the performance of other stock markets in the Gulf region.

 

Futures contracts of global ore measurement Brent compensated its early losses to climb to $ 55.50 for a barrel, with the extension of talks on Iran's nuclear program, which limit expectations of an imminent agreement that would allow Tehran to pump more oil in the market.

The main index of the Saudi market rose with a 0.4 percent with the rise of Saudi Basic Industries Corp (SABIC), the largest petrochemical producer in the Kingdom and to 80.75 riyals.

The National Petrochemical Company (Petrochem) shares jumped 7.1 percent after the company announced that its Saudi unity for Polymers completed all its obligations under the financing agreements with local and foreign banks and will not need financial guarantees from a third party.

Saudi Arabian Mining shares (metals) Rose 1.7 percent after the restart of the ammonia factory, which the company shut it down last week due to technical glitch in the facility for cooling.

The share of Saudi cement increased 1.5 percent after the company announced that it has signed a deal to build a new line at its plant in Rabigh.

The banking sector also recovers after a wave of selling in the previous two sessions and the sector index rose 0.6 percent.

The Dubai index rose 0.5 percent, with the rise of Dubai shares for parks and resorts 8.6 to 0.93 dirhams, recording its highest close since its inclusion in December.

The company - which is building an amusement park center worth 2.9 billion $ - said on Tuesday that it entered into a partnership with Lionsgate Entertainment for film production in Hollywood to build an amusement park.

Also most other stocks in Dubai rose, but trading volume dropped by nearly a quarter, which indicates that, the climb that the market witnessed this week probably began losing its driving steam.

The main index of Abu Dhabi rose with 0.6 percent with rise of both shares of Abu Dhabi Commercial Bank and Union National Bank with 2.9 and 3.5 percent respectively.

But national Abu Dhabi's share for power (energy) fell 8.8 percent after the company reported a net loss of 3.01 billion dirhams (820 million $) in 2014, compared with a loss of 2.52 billion dirhams in 2013 and said it will not pay a dividend for last year and will reduce   its capitalist spending this year.

And Qatar's index fell 1.5 percent, erasing some of the gains made in the past few days. Trading fell by more than half the size.

The decline in the main index of the Egyptian Stock Exchange with a 0.4 percent with decline in overall stock again. The Egyptian Edita for Food Industries shares begin trading on Thursday after covering the initial public offering heavily and perhaps investors sold shares for financial liquidity to buy shares of the company.