The most prominent Saudi market drivers expected in the next stage

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The consumer price index on an annual basis in Saudi Arabia yesterday recorded 1.6% for the month of March 2024, which is lower than expectations (1.9%) and the previous reading (1.8%).

 

But what are the most prominent Saudi market drivers expected in the next stage?

  • Business results of Saudi companies for the first quarter of 2024
  • The monetary policies that will be adopted by the major global central banks, especially the US Federal Reserve, with regard to interest rates, amid markets’ expectations that they will be reduced twice this year instead of the seven times that the markets had expected at the beginning of this year, which will directly affect the SAIBOR rate, that is, the lending rate for a period of three months between Saudi banks.
  • The ongoing geopolitical tensions in the Middle East and the possibility of expanding war, which directly affects oil markets. Despite the disappearance of the positive correlation between oil prices and the Saudi stock market, the trading in oil prices that we are currently witnessing, hovering around the $90 level, is considered good for the Saudi budget, as the break-even price for its budget for this year stands at approximately $80, according to the International Monetary Fund.
  • Initial offerings of Saudi companies

 

Technically, after the TASI index reached its lowest level at 10,262 points on October 24, 2023, it rebounded to currently reach 12,812 points, meaning it has risen by about 25% since the bottom it recorded (10,262 points) until today. The next challenge for the Tadawul index is to reach and exceed the psychological level of 13,000 points.

The picture appears positive for the Tadawul Index (TASI) for several reasons:

First: The regularity of the 20-, 50-, and 200-day moving averages and their upward trend, as the 20-day average exceeds the 50-day average, and the 50-day average exceeds the 200-day average.

Second: The MACD indicator is in blue, which is very close to the SIGNAL LINE in orange, in the positive zone, and any upward intersection between them gives positive momentum to the TASI indicator.

Third: The Relative Strength Index (RSI), which indicates positive momentum for the TASI index, recording approximately 57 points.

 

 

 

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

 

*All trading involves risk