07/09/2015
Liquidating facilities portfolios puts a pressure on the stock market
TASI, Saudi stocks index has lost yesterday 2.85 percent of its market value, which is 240.24 points. It closed at 8197.02 points, which is the lowest in seven and a half months, or since January 7th, 2015 when it closed at 8133.39. The index continues its decline for the sixth consecutive session, thus, losing more than 600 points during those sessions.
The market has reached its lowest trading yesterday at 8046.37 points. It declined 390.89 points. In contrast, the value of trading rose to reach 5.4 billion riyals, which is the highest during this month.This decline is the fourth biggest one during this year.
The Shares of seven companies had recoreded it lowest close since it was listed in the market. Namely: «electric industries company, the paper industry, bawan, MEBCO, ALKHODARI, Gulf general Insurance company, Enaya Insurance company.»
In this regard, Anas Al Rajhi, financial markets analyst explained trading began, saw the many speculators had panicked, what resulted in the liquidation of a number of investment portfolios.This liquidation puts pressure on prices, some stocks would be sold for less than fair value. It will cause panic amongst traders, thus, the decline in the market will happen at an accelerated pace. Stocks would be unexpectedly low, which might be an opportunity for some traders to attain stocks at attractive prices, which does not happen very often. If the index keeps falling, prices would fall, especially that many portfolios are within the current price range.
