The Saudi stock market registered solid gains last month. At the end of May 2013, the Tadawul All-Share Index (TASI) closed at 7,404.12 points, gained 224.3 points or 3.12 percent over the close of the previous month.
On an YTD basis TASI registered a positive increase of 8.86 percent or 602.90 points.
Highest close level for the index during the month was 7,404.12 as on May 29.
Commenting on the Tadawul’s report, John Sfakianakis, chief investment strategist at Masic in Saudi Arabia, said: “Appetite for global equities is sustained, especially for developed markets, and for a select few emerging markets.
Given the equities play that is expected to continue, the Saudi stock market is set to benefit.
Nobody can tell how far can the index grow from here but there are plenty of indicators that both on a valuations and given the momentum, equities in Saudi Arabia will do well this year.”
He said the fundamentals of the economy were rock solid and liquidity is picking up.
Corporate revenues are also a positive.
“Compared to the Gulf region, the Saudi market has underperformed Dubai and Abu Dhabi which have seen stellar year to date performances of 50 percent and 36 percent, respectively,” Sfakianakis added.
The report said total equity market capitalization at the end of May reached SR 1.49 trillion ($ 398.14 billion), increased by 3.34 percent over the close of the previous month.
The total value of shares traded for the month of May reached SR 116.26 billion ($ 31.00 billion), decreased by 19.42 percent over the previous month.
However, Jarmo T. Kotilaine, a regional analyst, said: “Tadawul has been a fairly slow and steady performer this year with the year-to-date gain at 8.9 percent as of the end of May.
This is far behind the regional “star performers” — the UAE bourses and Kuwait — but reflective of fairly continuous progress.
The performance of Qatar, Oman, and Bahrain has been more comparable to Tadawul with YTD gains of just over 10 percent.”
He said: “The global environment remains risky and there are concerns that the global stock market rally might run out of steam, especially if the unconventional monetary policies of many countries begin to be scaled back.
This could produce a mood swing analogous to the kind of volatility that we have seen repeatedly during the year.”
In terms of fundamentals, however, Kotilaine said the regional economies remain amidst a robust private sector-led recovery and this should be reflected in relative resilience in the markets as well.
The total number of shares traded reached 4.68 billion shares during the month of May 2013 compared to 5.00 billion shares traded for the previous month, decreased by 6.52 percent.
The total number of transactions executed during May 2013 reached 2.56 million compared to 3.28 million trades for the month of April 2013, decreasing by 21.87 percent.