SABOR jumppressures TASI as liquidity up 54%

Saudi stocks rose during today's session, supported by a 54% surge in trading activity which reached 3.6 billion riyals. The top 10 companies accounted for 43% of the total trades, with investors focusing on leading stocks such as Al Rajhi Bank, whose trading value doubled to 512 million riyals. Despite this, the Tadawul All Share Index (TASI) declined by approximately 0.33%, closing at 10,124 points. Most sector indices also fell, with 20 out of 22 sectors declining. The banking sector index, however, increased despite the rising cost of funding, which was driven by the 3-month SIBOR rising from 5.30% to 5.87%. This increase in SIBOR highlights the impact of higher borrowing costs on companies, even as earnings forecasts remain relatively strong. Meanwhile, the forward-looking price-to-earnings ratio for the TASI decreased to around 13.9 times, driven by falling prices without a corresponding decrease in profit expectations.

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