Financial analysts said, "five stimuluses support the Saudi stock market trading until the end of this year."
They explained to "AlEqtisadiah" that these incentives are the improvement in the balance of payments, the investment environment, and stimulate the private sector to implement new development projects, and the budget expected for 2019, which is an expansionary budget in spending, as well as the expectation of the market to join the index of emerging markets in the first quarter of next year.
Walid al-Rashed, a financial analyst, said that the market returned to achieve profitability for investors during the last period, despite the decline in some meetings.
He pointed out that the weakness of liquidity affects the circulation and reduces the appetite of investors in the market. Therefore, the further pumping of liquidity will enhance the performance, which will have a role in the direction of the market to register areas of resistance and new support during the coming period.
For his part, the adviser Fahmi Sobha, a researcher and an economic specialist, added, "The Saudi stock market is still difficult to attract smart liquidity to it with the continued decline in world oil prices, which was resulting mainly from geopolitical effects regionally and globally despite yesterday's rise in global markets to $ 64.49 as a result of the rise of US production by 24%."
He pointed out that the stimulus packages will have a positive impact that expected in the Saudi economy in the next year 2019 through more incentives that support economic growth rates.
The most important of which is the improvement in the balance of payments, the general environment that attracts investment, and the stimulation of the private sector with firm financial and legislative determination based on more selected investment funds directed to new industrial projects, in addition to the projected budget for 2019 as an expansionary budget in spending for the first time since 2015 especially infrastructure projects, construction sector, and basic industries, and work on the strategic system of the planned social protection program with its inputs.
He added, "Previous stimuluses will support the growth of the economy during the year and the continuation of growth over the next three years. As a result, the stock market will become a promising opportunity in the short term, which is indicating that this does not mean not to wait or provide a professional study of the sector of private traders until the blurry picture in the global and regional geopolitical landscape."
In turn, Mohammed al-Shammimi, a financial analyst, said, "The market started to move in the direction of horizontal upward, after reaching this trend to a low level at 7600 points, and above in the former resistance zone is 7920 points."
He pointed out that closing the market at 7662 points is also considered a support area.
He explained that the market could not penetrate the important resistance zone is 7920 points, and began to retreat from them, during the last week where it witnessed a weakness in trading rates and values. Therefore, the market could not penetrate the barrier 7920 points, a reference to the oil prices.
This is indicating that the market usually does not respond favorably with high oil prices, but it responds negatively to the decline in oil prices, and this is what happened last week.
"But oil prices, despite falling at $ 67 a barrel, continue to be a stimulus for the market," he said. According to the International Monetary Fund's November report, the Kingdom's budget equation for 2019 was at $ 73.3 per barrel, which is significantly lower than 2018 where the budget equation was at $ 83.4 per barrel, a decrease of ten dollars.
This indicates that the economic reforms have positively affected the decline of the Kingdom's dependence on oil revenues, and thus this is an important catalyst for the Saudi economy and the stock market.
Therefore, the market is waiting for the return of increasing liquidity levels, which will be positively reflected, and other stimuluses are expected in the first quarter of next year 2019, the accession to the global indices of emerging markets.
Al-Shammari stressed that the performance of the Saudi stock market compared to the neighboring GCC markets is the best.
Thus, it is becoming attractive to domestic and foreign investors especially as the Kingdom is about to adopt a large expansionary budget as well as the positive results of the economic reforms that are bearing fruit now that the non-oil revenues of the Kingdom have increased.
The Saudi stocks returned to profitability in Thursday's session to close at 7662 points, a slight increase of two points, with liquidity shrinking by 18 per cent to less than three billion riyals.
The rise came after the success of the real estate development sector in the face of the decline of the largest two sectors in the market, "basic materials" and "banks."
Ten sectors rose against the decline of the rest.
The rise was led by "food segmentation" by1 per cent, followed by "property management and development" by 0.96 per cent, and "long-term goods" by 0.9 per cent.
While the decline was led by "capital goods" by 1.3 percent, followed by "Investment and Finance" by 0.8 per cent, and "Media and Entertainment" by 0.8 per cent.
The highest turnovers were "basic materials" of 29 per cent with a value of SAR 856 million, followed by "banks" by 26% with a value of 768 million riyals, and "insurance" by 6 per cent with a value of 184 million riyals.
