RIYADH: Saudi stocks started and ended sharply lower on Sunday, in response to the Saudi Central Bank raising interest rates in line with the Fed’s steep rate hike and forecast for further hikes to curb inflation, but analysts believe the impact on the market will be short-lived.
Hesham AbouJamee anticipated that the market will remain stable for the remainder of this week, and will turn positive next week.
“What’s happening today is a reflection of what is happening in the global markets and currencies. I think the shock will be only today,” the founder and CEO of Mekyal Financial Technologies, told Arab News.
However, Fawaz Al-Fawaz, a Saudi-based independent economist and columnist, argues that the market will continue to shift.
“The markets are likely to continue to be volatile and in jittery mode until inflation is under control.”
At the end of Sunday’s session, the Tadawul All Share Index declined 2.61 percent to end at 11,161, while the parallel market Nomu declined 1.92 percent to finish at 19,875.
Speaking to Arab News, Saudi economist Ali Alhazmi said that the rate hike is not the only factor for this decline.
“The decline is also from the uncertainty about the global economics, or also the decline of growth and the existence of recession in major economies, especially the US and the EU.”
“We cannot avoid the continued closure in China, which affects supply chains. We also have the ongoing war between Russia and Ukraine.”
Ultimately, he concluded that the market direction is unpredictable, but he anticipated the decline to continue this week.