Mohammad Al-Faraj, Chief Investment Officer at Arbah Capital, said that the decline witnessed by the Saudi stock market is natural and limited compared to what it experienced during past geopolitical tensions, stressing that investors have become more aware of the strength of the Saudi economy and its ability to overcome shocks.

Al-Faraj explained, in an interview with Al Arabiya Business, that the positive outlook on the Saudi economy is reinforced by reports from credit rating agencies, foremost among them S&P Global, which affirmed the kingdom's outlook, alongside its praise for the solidity of the Saudi banking sector and low levels of non-performing loans, which supports expectations of banks achieving strong results in the second quarter.

He added that the pressures on the market are mainly due to investors' anticipation of corporate earnings and U.S. inflation data, which will play the biggest role in determining the Federal Reserve's direction on interest rates

. He pointed out that recording inflation levels below expectations could support market stability and enhance opportunities for keeping interest rates unchanged, which would positively impact investor sentiment.

Al-Faraj expected the market to hold near the level of 10,640 points before targeting the level of 10,800 points, stressing that economic indicators have become the main driver of markets more than political tensions.

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