TASI to remain rangebound between 9,500-10,500 pts in next 2 quarters: Miyar Capital CEO

Ghassan AlThukair, CEO & MD of Miyar Capital

Tadawul All Share Index (TASI) is expected to remain rangebound between 9,500 and 10,500 points in the next couple of quarters, Ghassan AlThukair, CEO & MD of Miyar Capital, told Argaam on the sidelines of the Financial Sector Conference.

The slower pace of interest rate hikes, global economic recovery and China’s reopening are likely to be positively reflected on the performance of Saudi companies during the fourth quarter of 2022.

Higher interest rates were the main reason behind the benchmark fall from the 13,000-point level. TASI continues to decline, despite an immediate bounce on stronger-than-expected corporate earnings.

The market gauge is trading lower, AlThukair said, adding that long-term impact is unlikely compared to global markets that sharply dropped.

The market trend will be defined by the upcoming rate-setting meeting. It could drop lower, hit by the negative global news of Silicon Valley Bank’s (SVB) failure.

Interest rate hikes will continue to control the US inflation, AlThukair elaborated, citing that the Saudi companies and economic growth remain solid, driven by Vision 2030.

He added that interest rates are forecast to be lifted by 25-50 basis points, noting that this hike was priced in by the market based on analyst estimates. He ruled out a significant market movement following the upcoming rate announcement.

Moreover, the Saudi banking sector demonstrates robust performance, backed by Saudi Central Bank (SAMA). However, interest rate hikes and a low appetite for borrowing from local banks may affect profitability.

The banking sector reported positive growth in 2022, driving TASI to firm at 10,500 levels, AlThukair concluded, shrugging off any problems in the sector in the medium and long term.