Arab News, Sat, May 04, 2024 | Shawwal 25, 1445
Material sector dominates TASI trading in first quarter of 2024
Saudi Arabia:
The materials sector led trading on Saudi
Arabia’s Tadawul All Share Index, accounting for approximately SR87 billion
($23.2 billion) or 15.11 percent of the market, according to TASI’s 2024
first-quarter report.
SABIC, the largest component of this sector,
boasted a market capitalization of SR234.9 billion, with trading value reaching
nearly SR7 billion.
The banking sector trailed with transactions
valued at SR71.22 billion, comprising 12.37 percent of the market. Al-Rajhi Bank
took the lead in market capitalization within the sector and secured the second
spot in trade value totaling SR23.62 billion.
In a February report by Bloomberg, Al-Rajhi Bank,
seen as an indicator of Saudi Arabia’s growth strategies, exceeded the
performance of JPMorgan Chase & Co., exhibiting nearly a 270 percent surge in
shares since the initiation of Vision 2030. It has outpaced both local and
global competitors, including state-supported banks, emerging as the largest
bank in the Middle East and Africa, boasting a market cap of around $95 billion.
According to Morgan Stanley analysts led by Nida
Iqbal, as reported by Bloomberg, “We see it as a long-term winner in the Saudi
bank sector… While Al-Rajhi is best placed for a rate-cutting cycle, we believe
current valuation levels reflect this.”
Gulf central banks, including Saudi Arabia’s,
frequently align their policies with those of the Federal Reserve to maintain
their currency pegs to the dollar. According to Bloomberg Intelligence senior
analyst Edmond Christou, a reduction in Fed rates could potentially bolster
Al-Rajhi Bank’s profitability and expansion, as it will encourage gathering
cheap deposits while enabling it to issue debt at more attractive levels.
In this period, the energy sector secured the
third position in terms of value traded, reaching SR55.4 billion. Saudi Aramco
topped the list with a market capitalization of SR7.47 trillion and registered
the highest value among companies traded on the index, totaling SR28.82 billion.
In March of this year, Aramco announced a net
income of $121.3 billion for its full-year 2023 financial results, marking the
second-highest in its history. Aramco credited these results to its operational
flexibility, reliability, and cost-effective production base, underscoring its
dedication to delivering value to shareholders.
Tadawul’s quarterly report also indicated that the
transportation sector recorded the fourth-highest value traded at SR39.25
billion, equivalent to 6.82 percent of the market. Among the top performers in
this sector was cargo firm SAL Saudi Logistics Services, ranking third in value
traded on the TASI during this period, following Aramco and Al-Rajhi Bank, with
a total value of SR22.74 billion.
SAL debuted on the main market of the Saudi
Exchange in November last year. With aspirations to manage 4.5 million tonnes of
air cargo by 2030, Saudi Arabia is empowering its logistics sector from a
supportive role to a pivotal driver of economic growth.
SAL, in which the Saudi government holds a 49
percent stake through the Saudi Arabian Airlines Corp., experienced a 30 percent
surge in its share price during its initial public offering, raising $678
million and becoming Saudi Arabia’s second-largest IPO of the year.
In a January report by Forbes, SAL’s CEO and
Managing Director Faisal Al-Beddah emphasized the company’s potential to shape
the future of logistics in Saudi Arabia and beyond. He stated: “Logistics is the
backbone of any economy. Now we are ready. We have the rotation, we have the
infrastructure, we have the regulations, and most importantly, we have the
mindset and the technology for Saudi Arabia to be the leading connecting
logistics hub in the region.”
The top gainer during this period in terms of
price appreciation was MBC Group, with a quarter-to-date percentage change of
127.6 percent, according to Tadawul.
Saudi Arabia’s MBC Group, a media conglomerate,
debuted as the first new listing on TASI in 2024. Its trading began on Jan. 8.
The company raised SR831 million through its initial public offering.
Saudi Steel Pipes Co. in the materials sector was
the second highest gainer, with price appreciating by 88.15 percent.
Etihad Atheeb Telecommunication Co. had a QTD
price percentage change of 81.91 percent making it the third-highest gainer on
the exchange during this period.
TASI concluded the first quarter of 2024 with a
3.6 percent increase, climbing by 435 points to reach 12,402 points.