السوق السعودي يسجل أدنى إغلاق أسبوعي في 7 أشهر
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00:00 We now turn to Mr. Mohamed El Omra, the president of the Gulf Central Bank for financial consultations.
00:05 Welcome to us, Mr. Mohamed.
00:07 Thank you for being here.
00:09 Today, we were able to break through the 10,626 points of the market before we started the depreciation process,
00:16 despite some pressures that the oil price is facing.
00:20 There are also still fears that we will monitor the most prominent data from the central banks this week,
00:27 specifically from the European Central Bank and even the Federal Central Bank, regarding the monetary policy.
00:33 Are we still heading towards caution in your opinion in the market?
00:37 Or can we start after these two speeches during the week's rounds, to get out of the area in which the Saudi market is moving?
00:45 In the name of God, the most merciful.
00:48 There is no doubt that the market, after the decline that we started four or five months ago, from the level of 11,900 to now,
00:57 it is clear that in the last three or four sessions, the market is trying to build a upward trend,
01:03 an upward channel after this decline to compensate for the losses.
01:08 But of course, this construction process was slow and cautious to a large extent.
01:13 There is fear that is more dominant than optimism that supports the purchasing processes.
01:19 Of course, the opposite is true in line with the announcement by the leading companies about their results.
01:24 Banks, for example, today STC, all have good results.
01:29 For example, the banking sector, the securities were under control,
01:34 the traders who were following the results were not worried.
01:39 And in a specific way, the securities were afraid of rising and surprising events.
01:45 But this did not happen, and therefore it gave a boost to the purchasing processes in banks.
01:50 Also, for STC today, the results are more than good, a big jump in results.
01:56 Of course, part of it was the best-selling profits as a result of selling a piece of land in the eastern region for about 1.3 billion.
02:03 But even if it was excluded, it still has good results and gives good results in terms of profit for the companies.
02:11 But of course, the general picture, in general, is that the interest rates are still in the shadows.
02:18 The decision-making process of central banks around the world is very important at this stage.
02:23 But I do not think that this week the Federal Reserve or the European Central Bank will be able to provide for the rising processes.
02:30 I think that most of the big international banks around the world
02:35 will have to provide for the rising interest rates, even temporarily, during this week's meeting.
02:41 But the most important point, Maysa, is that the interest rates on Saudi Riyal are much higher
02:48 than the returns on shares in the Saudi financial market as a whole.
02:53 For example, today, the bank deposits, or even Islamic bonds, or returns on shares in Saudi Riyal
03:02 give returns of 5.5% to 6%. And some of them, if we are talking about shares, some of them are exempt from the Zakat.
03:09 At the time, if we look at the total profits as an annual return on the market in general,
03:15 we find that the number of returns exceeds 4.25%, which means that the returns on shares,
03:24 and because of the rise in interest rates, give better returns with less risk compared to the entry into the stock market,
03:31 which is less returns and risk on the basis that there may be a loss of capital.
03:38 Therefore, this equation is not fair. It will be modified, and the prices of shares will be increased,
03:45 until things happen that change this equation, until we see a kind of balance,
03:50 or until we see that the return on shares exceeds the return on deposits or Zakat as an annual return.
03:58 Okay, today we watched the previous feeders. Despite the decline, which you see, Mr. Mohamed,
04:04 it was 55% in the third quarter, but today the share was able to overcome this decline and rise by almost 2%.
04:11 In general, how much do you think we will see the process of increasing the prices of EUR/USD again,
04:18 due to the return of international demand, and therefore we can see an improvement in the results for the fourth quarter,
04:24 in a better way than we saw in the third quarter, which was previous to the feeders.
04:28 You are right about the annual performance, which is 55%.
04:33 But if we look at the performance of the quarter compared to the last quarter,
04:37 we find that there is a jump in the profit margin of about 60%.
04:42 And it is what supported the share market today,
04:45 on the basis that there is a kind of optimism in this split jump, even if it is temporary.
04:52 But it gives signs that we may see an increase in demand for the feeders, including EUR/USD.
05:00 There are also reports around the world that show that the prices of EUR/USD around the world are also decreasing,
05:06 and therefore it is expected to continue to rise in the next phase,
05:10 especially since we are now close to the winter season, and as is known,
05:14 there is a kind of reorganization of the papers around the stocks, around the orders, around the stocks, etc.
05:22 And therefore, the picture seems positive, in fact, for the previous feeders,
05:27 with the main support of the demand and the prices of the stocks, which have improved well,
05:33 and reflected positively on the results of the previous feeders, temporarily,
05:37 because the important thing is to continue this improvement in the profit margin
05:42 and in the next phase, which certainly gives a positive picture for the share market.
05:47 And we saw a previous reflection of the feeders today with a share that increased from the purchasing process
05:52 as a result of these good results.
05:55 And the previous one, even today, may be reduced as well,
05:58 since it is clear that the companies that followed the previous one and did not perform well in the third quarter
06:03 are still just announcing the results, we are seeing a reaction to the previous share, Mr. Mohamed.
06:09 That's right, because the companies that followed, such as Yansab, like Kayan,
06:16 and now the previous one, have announced, and this gives me signals that we are very close
06:20 to the previous one itself announcing its results in a few hours, or maybe a day or two, depending on our expectations.
06:28 And therefore, if we look at the petrochemical stock market, in fact, its performance is very bad,
06:35 it is very disappointing, in fact, for the hopes.
06:39 The positive for SABC is that it is ahead of the feeders in a concentrated way,
06:44 and for this reason, the picture does not seem positive, even if it was announced by a previous company,
06:49 because it will mostly be affected negatively because of the results of the petrochemical companies
06:55 in light of the difficult conditions that the industry movement around the world is experiencing,
07:00 and specifically the industry of petrochemicals in a concentrated way.
07:03 Finally, we saw J.P. Morgan, Mr. Mohamed, at the end of the week,
07:08 he raised the rating of Saudi stocks to increase the weight of Muhaydah.
07:12 Will this also give signals to the process of concentration and entry, perhaps,
07:16 to foreigners with this recommendation in a larger way, despite the fluctuations that we are seeing in the markets?
07:22 A beautiful question, because we hope that reports like this will be effective,
07:27 but unfortunately, in reality, the picture is exactly the opposite.
07:30 The liquidity that has been sold in recent weeks is the liquidity of foreign currencies,
07:35 among them, of course, J.P. Morgan.
07:38 The problem of the Saudi market now is an increase in its connection with foreign influences
07:43 due to direct foreign investments through the market,
07:47 which over the past few weeks, all reports indicate that there were strong sales operations
07:52 from foreign currencies, and we hope that these conditions will not be the selling conditions.
07:59 How does it increase the weight and at the same time see foreign currencies,
08:03 which are actually the ones that focus on the sales process.
08:06 It was supposed at least that the report would be in line with the reality on the ground,
08:11 that is, the report increases the weight, which indicates the purchase.
08:15 It is supposed to see the purchase process, not the opposite,
08:18 to see the sales process as it is happening now.
08:20 In general, we do not anticipate the events, we wait for next week,
08:23 and then perhaps and hopefully we will also see the foreign liquidity return again
08:28 to the Saudi market in the absence of the uncertainty and sharp fluctuations
08:32 that the global markets and specifically the American markets are witnessing during the current phase.
08:37 Thank you, Mr. Mohamed Al-Omran, President of the Gulf Central Bank for Financial Consultations.
08:41 You were with us from Riyadh.