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00:00Let's move on to the analysis of today's session in the Saudi market with my guest, Mr. Mohammad Al-Amran,
00:05President of the Gulf Central Financial Consultations Center.
00:07Welcome, Mr. Mohammad.
00:10Tell me about the stability that the Saudi market is enjoying.
00:15Then I will take with you some details of the sitting news.
00:19With the siege of geopolitical tensions and the clear assurance that the Iranian side will not rise any more
00:28and cause the region to be in an unprepared war.
00:31The subject has affected all markets.
00:33Everything is back to its basics today, whether oil, gold, Wall Street and others.
00:38Is Saudi Arabia still cautious in its indicator and market?
00:43In the name of God, the Merciful.
00:45In general, there is no doubt that the market, when it fell several weeks ago,
00:50below the level of 12,700, was for many reasons,
00:53one of which, of course, was the geopolitical influences in the region.
00:57Now, of course, it has been reduced, without a doubt,
00:59with the evidence that when we follow the movements of the world oil prices and their stability,
01:03it gives us a primary indication, at least, that the situation has begun to stabilize and calm.
01:09For the market, of course, it is in a state of imbalance.
01:13It is trying to establish a price base for the decline that has begun.
01:16But this price base remains relatively in a horizontal course,
01:21if we look at it in broader terms.
01:24Because the market went up to 12,900, then it fell, then it rose, then it fell now.
01:29And it seems to me that we are close to the end of the correction.
01:33We have not confirmed yet, but the market is trying to establish this base.
01:38And for this reason, there is a kind of stability and a kind of maneuvering
01:43close to the level of 12,500 points, up and down, yesterday, today, the previous session.
01:49Therefore, the market considers 12,500 as a very important critical point to establish the price base.
01:56Of course, there is no doubt that there are other factors that will play a major role in determining the market course.
02:05Of course, one of the most important is the results of the companies in the first quarter of this year,
02:09which I think its announcement and appearance will play a major role in determining the course.
02:14Also, because this coincides with the announcement of the major companies.
02:18Today, this week is a week for tech companies in the United States.
02:22And this is, of course, important to determine the markets around the world,
02:26and not just in the markets of the region, including the Saudi financial market.
02:30And therefore, the market in general is trying to establish and be able to prove.
02:36But of course, the issue of success in forming the high channel and returning to the highs,
02:42this has not been confirmed yet.
02:44This can happen at any time soon, in light of the data that indicates that the stage of building the price base and rising again,
02:55we are seeing it now in reality, but we are just making sure.
03:00From a theoretical point of view, I think if we rise above the level of 12,580 or 12,600,
03:08this is almost the first positive sign for us to enter the high trend.
03:13Why don't you see the market as a positive sign from the STC deal,
03:18one of the companies affiliated with the World, with the General Investment Fund?
03:21There is an Egyptian saying,
03:25those who don't have a big one, buy a big one.
03:27The General Investment Fund, just because it is a partner with me,
03:31this is to protect my investments.
03:34The company did not leave out all its investments in the charts.
03:38It will sell 51% of it.
03:40First, there will be liquidity.
03:42Second, there will be support.
03:43And the nature of the agreements, perhaps with a foreign international company,
03:47we don't know what the future holds for the General Investment Fund.
03:51The guys cut the thread in the subject of future negotiations with other parties.
03:55Why did the market react to the STC deal today with a decline in shares?
04:00Indeed, a strange reaction.
04:02I agree with you.
04:04The deal has been going on for many years,
04:07and it has received a response,
04:09whether it was between the General Investment Fund with Mobiley,
04:13and now with STC.
04:15But it seems to have been achieved.
04:17For STC, of course, it is a sale and leaseback process,
04:22which means selling and re-renting,
04:25because it will continue to rent and use these charts.
04:29It is only an accounting process.
04:31As you mentioned, there will be cash agreements for STC
04:35of about 8.7 billion Riyals.
04:38It will decrease from the debt,
04:40because it is very clear that the company has a large debt.
04:43Because when you sell, the estimated value is about 22 billion,
04:48and they said they would pay 8.7, not 11 billion.
04:51This means that there are debts.
04:53This is also confirmed in the STC statement
04:56that the final amount will be determined after determining the debts,
04:59cash, and other things.
05:01Therefore, the sale will not only come in cash,
05:04it will reduce the debt ratio,
05:07and the debt on STC,
05:09because it is the parent company.
05:11But of course, on the other hand,
05:13the profitability will be reduced,
05:15because half of the company will sell it.
05:17This gives a kind of will for the company,
05:21at least internally,
05:23between the parent company and the company that follows it.
05:26But in general, I see a strategic direction,
05:28not only for STC,
05:30but for other companies that have assets,
05:32and freeze their assets,
05:34or criticize the assets for a long time.
05:36This is not the modern concepts in financial management,
05:41that these assets are sold and re-rented again.
05:45For example, the Emirates Airlines,
05:48by the way, today, most of its fleet does not own it.
05:51In fact, as soon as it buys a plane,
05:53it re-sells these investors a fixed income for a long time,
05:56and re-rents a plane from them again.
05:58Therefore, it keeps the liquidity,
06:00and does not freeze the money in fixed assets for a long time.
06:04This is not useful for it.
06:06The investor who buys this fixed income is a beneficiary,
06:12and the seller is also a beneficiary.
06:14Therefore, telecommunications companies,
06:16since they have fixed assets for a long time,
06:19are supposed to move in this direction.
06:22Of course, by selling the towers,
06:24they may sell other things,
06:26so that they do not freeze their liquidity in fixed assets,
06:29and therefore, the process is a win-win.
06:32They sell it and re-rent it.
06:34Therefore, the buyer benefits from the fixed income for a long time,
06:38and the seller benefits from the liquidity,
06:40and uses it through the rental contracts.
06:42Okay, nice. Let's go back to Aramco.
06:45What is the reason, from your point of view,
06:47that the market is paying more than Riyals for Aramco?
06:51Is there a positive reason?
06:53Is it the geopolitical tensions,
06:55and that Aramco may produce more than it is required
06:59from the quota agreed with OPEC plus,
07:02even though there is commitment to this issue?
07:04Is this the reason why Aramco paid the price for the rise?
07:08There is no doubt that the geopolitical risks,
07:12and the support of oil prices in recent days,
07:16to levels above 90 USD.
07:18It is true that it fell below 90 USD,
07:20but since it is in an upward trend,
07:22and is maintaining this trend,
07:24this will certainly be positive.
07:26Aramco.
07:27Let's not forget that the financial reports
07:29from international institutions
07:31about their expectations for oil prices
07:33during this year,
07:34all of them began to give signs of rising,
07:36in light of the decrease in demand,
07:38and in light of the decrease in capital investments.
07:41Therefore, there will be a great dependence
07:44on oil in a greater way than expected,
07:47and for this reason,
07:49they adjusted their expectations for the rise.
07:52This confirms that there are investment opportunities
07:55for Aramco,
07:57especially that its performance is stable,
07:59and the financial distribution is very favorable.
08:02This will draw a large number of investors
08:05who are looking for investments in energy,
08:08and in companies that provide
08:10very favorable cash distribution.
08:12For this reason,
08:13I see that there are opportunities,
08:15and today we can say that the energy sector
08:18is the main player in the rises,
08:20at the time when basic materials,
08:22banks, and telecommunications
08:24were under pressure.
08:26Thank you very much.
08:27My guest in Riyadh,
08:28Mr. Mohamed Al-Amran,
08:29and you are the president of the
08:31Gulf Council for Financial Consultations.