Tadawul Review:

Tadawul All Share Index (TASI) declined for the third consecutive day, losing 257 points (-2.2%) to close at 11,572 levels, marking the lowest closing since July 19,2022. The volatility in international markets over the weekend was the major reason for the decline in TASI. TASI started the proceedings on a negative note and gradually declined to its intraday low of 253 points before reducing some of its losses. In general, the decline was broad-based as all sectors closed lower except for the Retailing sector, while only 18 stocks managed to give positive closing out of 212 stocks. The decline was led by the Banks (-2.2%), followed by Materials (-2.6%) and Utilities (-5.7%) sectors. Index heavyweights, namely Al-Rajhi Bank (-2.2%), Saudi National Bank (-2.5%), and ACWA Power (-7.3%), pulled the index down the most. The trading activity witnessed a decline in the volume and value of trading by -15% and -29%, respectively, to reach 138mn shares and SAR5bn. The index has fallen close to the levels where it had earlier taken support. Further downside risk in TASI is increasingly limited though investors may decide to stay cautious ahead of an important policy decision by the Fed. 

 

 

Market Wrap International:

The global equity indices are set to enter a FedWeak where the Fed Open Market Committee (FOMC) will deliver a closely watched verdict on policy rate on 21st September. The Bank of England and Bank of Japan will also conduct monetary policy meetings next week. A 75bps hike by Fed, a third such hike, has become consensus expectations with a few investors expecting upto 100bps rate hike. Besides the quantum of rate hike, investors will be tracking Fed comments to gauge the hawkishness for future rate hikes and the levels where the Fed is likely to pause hiking rates. Other important economic data for next week relates to PPI and the housing market. The benchmark indices in the U.S exhibited heightened volatility last week in the wake of hotter than expected CPI data. Investors will likely remain cautious ahead of data release.

Investors in Europe will also track updates on the EU plans for fiscal support and any comment from the ECB officials ahead of Fed policy decision. The BoE is expected to continue policy tightening with expectation of ramping up the quantum of rate hikes to better tackle inflation in the region. The benchmark Stoxx Euro 600 Index and other country level indices have already taken a significant battering last week hence the value of surprise element to either Fed hike or official comments from ECB may not have a magnified impact on the market.

In Asia, the lifting of COVID-19 restrictions in China's biggest city may provide initial excitement though pressure on currency and the risk of global recession remain major drags for any meaningful recovery in key indices in the short-term. Markets may move sideways ahead of the Fed decision. Overall, BoJ is unlikely to change interest rates though the bank may look to provide support to Yen via other tools.

 

 

 

Tadawul All Share Index (TASI) declined for the third consecutive day, losing 257 points (-2.2%) to close at 11,572 levels, marking the lowest closing since July 19,2022. The volatility in international markets was the major reason for the decline in TASI. TASI started the proceedings on a negative note and gradually declined to its intraday low of 253 points before reducing some of its losses. In general, the decline was broad-based as all sectors closed lower except for the Retailing sector, while only 18 stocks managed to give positive closings out of 212 stocks. The decline was led by the Banks sector (-2.2%), followed by the Materials (-2.6%) and Utilities (-5.7%) sectors. Index heavyweights, namely Al-Rajhi Bank (-2.2%), Saudi National Bank (-2.5%), and ACWA Power (-7.3%), pulled the index down the most. The trading activity witnessed a decline in the volume and value of trading by -15% and -29%, respectively, to reach 138mn shares and SAR5bn. The index has fallen close to the levels where it had earlier taken support. Further downside risk in TASI is increasingly limited though investors may decide to stay cautious ahead of an important policy decision by the Fed.

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