TASI stocks: 41 companies record their lowest historical lows in a week

In a sharp downturn that has gripped the Saudi stock market, a recent survey by the Okaz newspaper revealed that 41 companies listed on the main market (TASI) have been subjected to intense selling pressure, pushing them to their lowest historical lows since their listing. These declines come amidst a period of volatility in the financial markets, influenced by global and local economic factors that are prompting investors to restructure their portfolios.

Background to selling pressure and the breaking of technical support levels

Last week's trading saw significant selling pressure, leading to the breaking of key technical and historical support levels for these companies. Financial analysts indicate that breaking historical lows is a negative technical signal reflecting the dominance of bears (sellers) in the stock's direction. This is often caused by a combination of weak financial results for some companies, rising global interest rates which put pressure on stock valuations, and geopolitical tensions that affect traders' risk appetite.

Thursday... the peak of historic declines

Monitoring revealed that Thursday's session, February 26, was the most severe for the market, with 28 companies simultaneously joining the list of new all-time lows. These companies spanned vital sectors such as cement, insurance, and retail, indicating a widespread decline. The recorded prices were as follows:

• In the basic materials and cement sector, Takween recorded 5.36 riyals, Aslak 16.00 riyals, and Kemanol 6.15 riyals. The cement sector also declined, with Najran Cement recording 6.25 riyals and Al-Jouf Cement 5.58 riyals.
• Insurance and financial services sector: The list included UCI at 24 riyals, Aseeg at 6.26 riyals, United Insurance which dropped to 2.95 riyals, and Emaar at 8.28 riyals.
• Retail and Food Sector: The list included “Al Mazraa Markets” at 12.44 riyals, “Bin Dawood” at 4.38 riyals, “Al Dawaa” at 46.9 riyals, and “Tanmia” at 49.28 riyals.
• Other companies: Talco recorded 30.3 riyals, OGC 23.06 riyals, CGS 7.05 riyals, Tamkeen 46.36 riyals, Printing and Packaging 6.84 riyals, Theeb 31.64 riyals, Lumi 38.54 riyals, Redan 18.00 riyals, Construction Station 49.3 riyals, Modern Mills 25.66 riyals, Production 25 riyals, Dar Al-Mu'addat 27.74 riyals, Fakih Medical 29.82 riyals, Canadian Medical Center 5.6 riyals, Tasheel 135.10 riyals, and Diraya 22.72 riyals.

Sequence of declines during the week

Thursday's session was not the only one; it was preceded by successive declines during the week, confirming the continuation of the downward trend:

• Wednesday, February 25: Al-Tatweer Food Company (90.05), Al-Omran (21.21), Al-Nayefat (11.14), Marana (8.67), and Al-Anadia for Sports (6.78) recorded their lowest levels.
• Tuesday, February 24: Al-Fakhariya stock was the only one to record a low of 17.15 riyals.
• Sunday, February 23: The week opened with a wave of lows that included “Flynas” (56), “Al-Manjam” (49), “Marafiq” (28.70), “Saco” (22.73), “Liva” (9.60), and “Amana Insurance” (5.42).

Economic impacts and future prospects

The fact that so many companies have reached historic lows carries a dual significance. On the one hand, it could represent an attractive investment opportunity for long-term investors and bargain hunters seeking stocks with low price-to-earnings ratios and attractive price-to-book ratios. On the other hand, this situation calls for caution and close monitoring of market liquidity levels and the upcoming quarterly results of these companies, as a rebound from these lows will require strong economic catalysts and a return of investor confidence.