The Saudi stock index hit a record high yesterday. The Tadawul All Share Index (TASI) closed at 15,073.09, up 33.6 points or 0.22 percent from Tuesday’s closing. The index broke the previous intra-day high of 15,119 points, reached on September 21, to touch 15,137.45 points during morning trade, according to English Daily Newspaper the Arab News.
Salim J. Ghalayini, a Riyadh-based financial consultant, told the Arab News that “last month stock market correction was a blessing in disguise. The correction provided an opportunity for the market to consolidate, and for the investors to lay back and do some analysis about their portfolios and recent transactions. This period of wait and see is over and the stock market started to charge again reaching new highs.”
He added: “The major factors that are influencing the current market drive are the sustained high price of oil, increased government spending, positive consumer and investor sentiment driven by the recent 15 percent salary increase to most employees, successful IPOs, and the seasonal increase in commercial spending during Ramadan.
Although high energy cost will eventually impact global economic growth, however the sustained high prices produce a budget surplus to the oil exporting countries like Saudi Arabia. This surplus eventually becomes a major driver to the national economy. In fact, SABIC (Saudi Basic Industries Corp.) and a few other major Saudi companies, which make over 50 percent of the local market capitalization, continue to benefit from high oil prices. Based on the above, the year-end outlook for the Saudi stock market is positive and we expect the index to attain new heights over the coming weeks.”
