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Foreign investors sold the most Saudi Arabian stocks in almost five months last week as concerns about economic growth and a disappointing outlook for banks in the kingdom hit sentiment.
Outflows reached 6.5 billion riyals ($1.7 billion) in the week through Aug. 3 as the benchmark Tadawul All Share Index slumped 4%. That resulted in the largest net exit by non-residents and worst performance by the local market since March, when global equities were in the grips of a crisis over the health of US banks.
A rally this year in the Tadawul pushed it to the brink of a bull market in late July, when eight straight sessions of declines halted its surge. A relatively stable oil price as OPEC+ members curbed production and a slew of government projects supported stocks before the recent drop.
“The downward trend is a natural occurrence following a strong rally in the early part of the year,” said Jassim Al-Jubran, head of sell-side research at Aljazira Capital. A downgrade by the International Monetary Fund of its forecast for Saudi growth in 2023 as well as cautious earnings guidance from some large banks also contributed to the decline, he said.
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