Tadawul Review:

Tadawul All Share Index (TASI) was in a state of freefall on Sunday losing a massive 525 points (-4.4%) to close at 11,299 levels. The decline was the biggest since a 4.5% drop on 28th Nov last year. The TASI rout coincides with declining Brent prices (-7.5% WoW) as well as global recession fears. Selling was recorded across the board with all the sectors closing down and only 11 shares closing positive (advance to decline ratio of 0.06x). Banks (-5.3%), Materials (-3.7%), and Energy (-3.9%) pulled the index down by a cumulative 336 points. Amongst the stocks, ARAMCO (-4.0%), Al Rajhi (-4.4%), and SNB (-5.3%) were the major drags on the index while Al Gassim Investment holding bucked the trend by closing up by 8.4%. The trading activity receded by 18.5% and 29.2% to 179mn shares and SAR6.3bn due to periodic changes implemented by FTSE Russell in the last session. After today’s session, the index has erased nearly all the gains recorded YTD (+0.2% YTD) and is down by 18% since its high of 13,820 earlier in the year. Weakening oil prices, recession fears, and a lack of positive triggers may likely push the index into a bear market.

 

 

Market Wrap International:

The global equity indices are likely to see continued volatility on the back of growing talks of global recession amid heightened inflationary pressure. Last week’s rate hike decisions by the Fed and ECB has increased pressure on other central banks in developed countries to respond to inflationary pressure. In the U.S, the trading activity will be cut short to four days due to holiday on Monday. Overall, the investors are likely to keep a close eye on housing sales data and consumer sentiment surveys for any clue to the extent of economic slowdown.

In Europe, data on inflation and consumer confidence in the U.K & Eurozone is due next week and may set the stage for further volatility in the indices. The benchmark Stoxx Euro 600 Index is already trading at close to bear territory (down 18.5% from its peak).

In Asia, currency weakness in Japan, amid lack of central bank’s response to inflation, is gaining traction and may drive further volatility in the market. Meanwhile, China and Hong Kong have emerged as a safe haven for the global investors in recent trading sessions given pro-growth macro backdrop post removal of most of COVID-19 restrictions. The equity indices in China and Hong Kong may continue the outperformance in near-term.