Several corporate results put pressure on the Saudi stock market amid a decline in petrochemicals

The Saudi stock exchange continues to fall since the beginning of this week, in the face of a state of divergence between the results of listed companies, which was reflected in investor sentiment and caused the general index to fall. The general index “TASI” fell by 0.3% in early trading and recorded 11,510 points, amid noticeable pressure from the basic materials sector, which includes shares of petrochemical and cement companies, despite the rise in leading shares such as “Al Rajhi Bank”, “Aramco” and “National Bank”. Mixed results attract sentiment. Mary Salem, a financial analyst at Al Sharq, expects investor sentiment in the market today to see the same variation seen in the results, amid optimism over positive results for the communications sector, versus concerns over the basic materials sector, particularly petrochemicals. She said: “The telecommunications sector is doing better this year, and these increases are not pricing in positive results as much as they are optimism about growth opportunities in the sector. Mobily’s positive results today are a translation of that optimism.” Before the start of trading, Etihad Etisalat (Mobily) announced a growth in its quarterly profit by 10.5% to 916 million riyals during the third quarter of the year, which was higher than analysts’ expectations. The company’s shares rose by more than 2%. However, Sahara International Petrochemical Company (Sipchem) suffered a sudden loss of around 468 million riyals during the same quarter, defying analysts’ expectations to post profits, which could have a bigger impact on trader morale. The company’s shares fell by more than 5%. Salem added, “Sipchem’s losses worsened compared to the second quarter and completely defied analysts’ estimates. The stock has already fallen more than 20% this year, making it among the worst performers in the petrochemical sector.” The suffering of petrochemicals continues. For his part, Saad Al Thaqfan, a member of the Board of Directors of the Saudi Economic Association, believes that the results of “Sipchem” indicate the continued suffering of the petrochemical sector, especially with the drop in prices and the increase in supply, amid weak demand. He added during an interview with Al-Sharq that “the petrochemical sector is highly affected by high interest rates, directly by increasing financing costs for companies, and indirectly by weak economic growth and demand.” He expected that the expected drop in interest rates in the coming period would lead to improved results for petrochemical companies in the coming quarters. Shares of other companies in the sector, such as “SABIC”, “Chemanol”, “Yansab”, “Advanced” and “Kayan,” fell with rates reaching 1.7%.