TASI trims early gains, closes below 7,000

23/04/2017 Argaam
by Brinda Darasha

Retailers lifted the Saudi stock exchange on Sunday following news that Saudi King Salman had issued royal decrees to restore bonuses and allowances for public sector employees and military personnel.

 

However, the initial elation wore thin towards the end of the session. The benchmark Tadawul All Share Index (TASI) pared gains from early highs of over 7,000 and closed just 1 percent higher at 6,969.

 

“We expect an improvement in consumer spending going forward with the restoration of bonuses and allowances as this will put more money in the pockets of the consumers, especially with Ramadan and Eid around the corner,” Muhammad Faisal Potrik, head of research at Riyad Capital told Argaam.

 

Total trading turnover was over SAR 3.4 billion as 140 stocks trading up, while 28 declined.

 

Nearly all sectors closed in positive territory with the retail sector climbing over 6 percent.

 

At a stock level, Farm Superstore and Saudi Company for Hardware were up over 9 percent, while Jarir Marketing rose over 8 percent.

 

“Retail stocks should react positively in the short run but we would be closely tracking spending indicators for a more accurate picture,” Potrik added.

 

According to a note from Al Rajhi Capital: “The decision to reverse allowance cut is likely to boost overall consumption in the economy, as higher disposable income will benefit core consumption sectors i.e. retail and food sectors.”

 

Discretionary spending in Saudi Arabia had been squeezed in the past quarters as the austerity measures curbed consumer spending. 

 

Almarai shed some early gains and closed 1.8 percent higher at SAR 73.25. The dairy producer posted a 14 percent rise year-on-year in Q1-2017 net profit.

 

Savola, which has a 36.5 percent stake in Almarai, also rose over 3 percent to SAR 43.20.

 

Meanwhile, Saudi Paper manufacturing Co. fell to its maximum daily limit at SAR 8.30. The company said its accumulated losses reached SAR 151.5 million.    

 

Write to Brinda Darasha at brinda.d@argaamplus.com

Comments {{getCommentCount()}}

Be the first to comment

loader Train
Sorry: the validity period has ended to comment on this news
Opinions expressed in the comments section do not reflect the views of Argaam. Abusive comments of any kind will be removed. Political or religious commentary will not be tolerated.