The value of foreign investments in Saudi stocks recorded at the end of last March, their highest level in history at 241.5 billion riyals, which constitutes 2.51 percent of the market value of 9.63 trillion riyals by the end of the same period.
The net purchases of foreign investors in the Saudi stock market amounted to about 5.8 billion riyals during the first quarter of this year, compared to 1.1 billion riyals in the same period of 2020, which means an increase in foreign flows of 444 percent.
According to the monitoring unit of the reports in the Al-Eqtisadiah newspaper, based on the data of the Saudi Stock Exchange Company (Tadawul), the net purchases of foreigners during the aforementioned period of this year came after the total purchases of 43.6 billion riyals, compared to total sales of 37.9 billion riyals.
This coincided with the main market index, “TASI”, rising 18.1 percent, to close at 9,907.8 points by the end of the aforementioned period, compared to 8,689.5 points by the end of 2020.
And during last March, their net purchases amounted to 3.5 billion riyals, which is the highest monthly purchase in nine months since June 2020, when their net purchases amounted to 4.9 billion riyals.
The “TASI” index rose 8.3 percent during March, to close at 9,907.8 points by its end, compared to 9,145 points at the end of February before it.Monthly progression
Net purchases by foreigners in Saudi stocks amounted to about two billion riyals in January 2020, with the market declining 1.7 percent, and then purchases of 2.5 billion riyals after the index fell 7.5 percent in February.
While foreign investors recorded net sales of 3.4 billion riyals in March, with the market dropping 14.7 percent, then net purchases of 1.6 billion riyals in April, coinciding with the rise in the market of 9.3 percent during the same month, then net purchases in May. ) With a value of 2.8 billion riyals.
They recorded net purchases of about 4.9 billion riyals in June, with the market rising slightly by 0.2 percent, then purchases of 0.9 billion riyals in July, with the index rising by 3.3 percent, and 3.1 billion riyals in August. With the market up 7%.
Their net purchases amounted to 0.4 billion riyals in September, with the index rising by 3.9 percent, then purchases by 2.4 billion riyals, taking advantage of the market decline of 4.7 percent in October, then purchases of two billion riyals, with the index rising 10.6 percent in In November, they recorded net sales of 0.6 billion riyals, with the index dropping 0.7 percent in December.
The foreign purchases in June coincided with the implementation of the last tranche of the fifth phase of the FTSE indices on the 22nd of the same month, so it was the highest monthly purchases during 2020.
In the first month of 2021, foreigners recorded net purchases of 1.9 billion riyals, with the index rising 0.1 percent in January, then net purchases of 0.3 billion riyals, with the index rising 5.1 percent in February, then net purchases of 3.5 billion riyals, with a rise The index is 8.3 percent in March 2021.
An annual development
Saudi stocks attracted foreign inflows of “net purchases” during the past year 2020, amounting to 18.7 billion riyals (five billion dollars), registering the second highest level since foreigners were allowed to directly invest in the market in 2015, despite the outbreak of the Corona pandemic.
The most attractive year for foreign investment was 2019, at about 91.2 billion riyals, bringing the total of the two years together to about 110 billion riyals.
In June 2015, the Saudi Capital Market Authority allowed qualified international investors to buy local shares directly, while previously their investments were limited to “swap agreements” only.
The foreign investor’s stake in Saudi stocks includes foreign strategic corporate partners, swap agreements, resident investors, qualified foreign institutions, and finally managed portfolios.
On August 29, 2019, Saudi stocks joined the MSCI Emerging Markets Index with the implementation of the second phase by annexing 50 percent of the market weight, making the Saudi market weighing 2.8 percent of the global index.
It also included 100 percent of the market for the S&P Index, and 75 percent for the FTSE Russell index.
Also during December of 2019, Saudi Aramco was included in Morgan Stanley and FTSE Russell emerging market indexes, adding new foreign flows to the market.
The first phase of the joining operations for the two global indexes FTSE Russell and S&P Dow Jones for emerging markets took place on March 18, 2019, according to closing prices of March 14, 2019.
Based on what was announced by “FTSE Russell” within the plan to join the Saudi Stock Exchange to emerging market indices, the first of the five stages has been implemented, and the first stage represents 10 percent of the total weight of the Saudi financial market.
On the same date, the first phase of the Saudi Stock Exchange’s accession to the S&P Dow Jones Index, which took place in two phases, was implemented. The first phase was 50 percent of the total weight of the Saudi financial market.
The second and third phases of joining the FTSE indices were implemented on May 1 and June 24, 2019, with 15 and 25 percent weighted, respectively.
The first phase of the Saudi stock market’s accession to Morgan Stanley emerging market indexes was implemented on May 29, 2019, with a weight of 50 percent of the market.
FTSE Russell had decided on March 28, 2018, to include the Saudi market in the ranks of secondary emerging markets, in stages beginning in March 2019 and ending in March 2020, due to the large size of the market, but it ended it on the 22nd. Last June to reduce risk to investors.
On July 25, 2018, Standard & Poor’s Dow Jones Company decided to upgrade the Saudi market to an emerging market, starting from March 2019.
The foundation added at the time, “The promotion will take place in two phases, the first coinciding with the quarterly rebalancing on March 18, 2019 by 50 percent, and the second with the annual review on September 23, 2019, 100 percent.” Really.
Economic Reports Unit