Market downturn likely temporary amid strong earnings, says analyst
Financial analyst Abdullah Al-Jubaili says the market index decline may be short-lived as companies, especially blue chips, continue to post strong results.
Key Takeaways
AIFinancial analyst Abdullah Al-Jubaili said the recent decline in the market index may be temporary, as companies—particularly leading firms—continue to announce excellent financial results.
Speaking to Al-Ikhbariya, he explained that the rotation of existing funds in the US market, rather than the injection of new liquidity, amounts to around 300 billion, or approximately 3.3 billion riyals (SAR) daily. This, he noted, is comparable to having another Saudi stock market operating within the US market.
He added that the recent drop in trading activity on the Saudi market, alongside the ongoing series of declines, suggests that investors are not strongly convinced to sell at current prices. Instead, they prefer to hold onto their positions in these companies; otherwise, there would have been a noticeable increase in selling liquidity.
Al-Jubaili continued that most traders believe the current situation is temporary and that new opportunities are emerging. Therefore, any upcoming upward trend in the market is likely to see average liquidity levels surpassing those currently observed.
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