Mazen Al-Sudairi, head of research at Al-Rajhi Capital, said: Saudi stock market It was one of the fastest rising markets this year, unlike the Standard & Poor’s index in the US market, in which the weight of oil companies reaches 3%, and which did not benefit from the rise in energy prices.
He explained that the rises in the Saudi stock market were supported by the rise of oil by 40% since the beginning of the year, but the positive news regarding the negotiations between Ukraine and Russia and the closures of China pressured oil prices and thus affected oil, in addition to the fact that the world is in a state of evaluating growth rates due to high inflation rates. Which affected the performance of the market.
He added that the other factor that affected the performance of the market was interest rates. During the past two weeks, the banking sector was affected by the assumption that the rise in oil prices may postpone the interest rate hike, although the financial sector in the Saudi market will be positively affected by the rise in oil, “according to our estimates.” .
He pointed out that the expected interest rate hike improved the performance of the banking sector in Saudi Arabia during the past three sessions, especially the banks linked to government lending.
He explained that the impact of the Saudi market and Aramco on the rise of oil above $100 per barrel is limited because the concession fees above this price rise to 80% and Aramco’s benefit from this matter is limited, and therefore this matter is not affected by the decline in oil from $130 to $100 per barrel of oil.
