Saudi Stock Market Declines Amid Disappointing Earnings; Egypt’s Market Rebounds
On Sunday, March 2, 2025, Saudi Arabia’s stock market extended its losing streak for the fourth straight session, weighed down by lackluster corporate earnings and external economic pressures. The benchmark Tadawul All Share Index (TASI) fell by 0.6%, closing at 12,035.45 points, reflecting a continued downturn in investor sentiment.
Key Contributors to the Decline
Saudi stocks faced significant pressure as major banking and financial institutions failed to meet market expectations.
- Al Rajhi Bank: One of Saudi Arabia’s largest banks, Al Rajhi Bank, saw its shares decline by 0.4%, adding to the overall negative sentiment in the market.
- Riyad Bank: Riyad Bank’s stock took a more substantial hit, dropping by 3.4%, which significantly contributed to the index’s downward trajectory.
- Saudi Tadawul Group: The operator of the Saudi stock exchange reported annual profits that missed analysts’ forecasts, leading to a 0.5% decline in its share price.
Market Statistics
The total trading volume for the day stood at approximately 3.45 billion Saudi Riyals (around $922 million). Out of all the stocks traded, only 37 advanced, while a staggering 209 stocks declined, signaling weak market confidence.
Broader Economic Context
The Saudi stock market’s decline coincided with a recent drop in global oil prices, a key driver of the Kingdom’s economy. Oil prices fell on Friday amid concerns over geopolitical tensions, economic policies, and supply chain disruptions. Several factors contributed to the uncertainty, including:
- Geopolitical Strains: Tensions between the U.S. and Ukraine reportedly escalated, impacting global financial markets.
- Trade Policies: Upcoming U.S. tariffs and other trade restrictions created further unease in the investment climate.
- Oil Supply Adjustments: Iraq’s decision to resume crude oil exports from the Kurdistan region added supply-side pressure on oil markets, influencing prices and indirectly affecting Gulf stock markets.
With Saudi Arabia’s economy heavily reliant on oil revenues, fluctuations in crude prices often translate directly into stock market movements.
Egypt’s Stock Market Rebounds
In contrast to Saudi Arabia’s market downturn, Egypt’s stock market recorded a strong performance, reversing a four-day losing streak. The EGX30, Egypt’s benchmark index, gained 0.8% on Sunday, driven by robust earnings reports from key companies.
Top Performers in Egypt
- Commercial International Bank (CIB): Egypt’s largest private-sector bank saw its shares rise by 1.1%, providing significant support to the index.
- Fawry for Banking Technology and Electronic Payment: Shares of the fintech giant surged by 4.4% after the company reported an increase in 2024 profits.
- E-Finance for Digital and Financial Investments: The payments solutions company also performed well, with its stock climbing 2.7% after reporting a sharp rise in fourth-quarter earnings.
Egypt’s financial sector showed resilience, driven by increased demand for digital payments and banking services.
Monetary Indicators in Egypt
Egypt’s money supply (M2), a measure of cash and easily accessible deposits, grew significantly. According to the central bank, the M2 money supply increased by 32.1% year-on-year in January. This rise suggests a growing economy with increased liquidity, which can potentially boost investment and market activity.
Regional Market Overview
Beyond Saudi Arabia and Egypt, stock markets across the Gulf region displayed mixed performance:
- Bahrain: The market gained 0.6%, closing at 1,971 points.
- Oman: The Muscat Securities Market inched up by 0.1%, ending at 4,441 points.
- Kuwait: The Kuwaiti market climbed 0.5%, reaching 8,732 points.
- Qatar: The Qatari stock exchange remained closed for a public holiday.
The performance of regional markets highlights the varying responses to both local and global economic factors.
Conclusion
The contrasting trajectories of Saudi Arabia and Egypt’s stock markets emphasize the significant impact of corporate earnings and economic conditions on investor sentiment. While Saudi stocks struggled due to disappointing financial reports from major banks and the stock exchange operator, Egypt’s market surged on the back of strong earnings in the banking and digital payments sectors.
Going forward, investors in the region should keep a close eye on corporate earnings, oil price fluctuations, and geopolitical developments, as these factors will continue to shape market trends. With ongoing global uncertainties, market participants must adopt a cautious yet strategic approach to navigate the evolving investment landscape.
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