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Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
Executive Summary
The purpose of this study is to analyze certain market anomalies observed globally that can be exploited to earn higher returns on
the equity markets in Saudi Arabia. Some of these anomalies, such as the January effect, are so popular that considerable research has
been done to explain them. In addition, many of these anomalies should last for a limited period because as they gain in popularity,
the abnormal gains associated with them are arbitraged away.
Our findings lead to some strategies that can be used by traders and investors to earn above average market returns. While some
of these strategies are based on fundamental factors, others are driven by technical indicators. Below are the key findings of our
research:
(1) Calendar Anomalies
• Index performs best on the first trading day of the week: We have computed the best performing day of the week to be the
first trading day of the week in the Saudi market in terms of the number of positive days and aggregate percentage returns. This
means an investor looking to sell their holding should always sell on the first trading day of the week.
Strategy: An investor looking to sell their holding is better off selling on the first trading day of the week, i.e. Sunday and
should avoid buying on that day on average.
• Monthly returns vary across sectors: Analysis of the Saudi stock market’s monthly returns over the last decade indicates that
all sectors show gains following the Ramadan month, the energy sector gains the most, followed by banking and petrochemical
sectors.
Strategy: A short-term gain is likely if one invests in the market before the Ramadan period and sells in the subsequent
month, and increase positions during the end of March and October, where the TASI always showed the worst
performance during these mentioned months and then recovered significantly.
(2) Effect of valuation on market performance: The correlation between valuation parameters and stock market performance
is strong. Our analysis for the last eight years correlation between P/E and TASI index level indicates that a low PE ratio is usually
followed by a significant increase in the index and a high P/E ratio by a muted pace of growth.
Strategy: A long-term strategy to make significant gains would be periodic investment in the market when the P/E ratio
is below the long-term average. The eight year average in our analysis is 17.1x TTM earnings.
(3) Volume indicator at Tops and Bottoms in the market movement: Historically, volume traded on the TASI has been in line with
the index trend, i.e. volume increases with a rise in the TASI and decreases as the index corrects.
Strategy: Before executing a trade, it is advisable to confirm the trend by gauging the volume traded – enter when the
volume traded is trending up with the index and avoid when it is trending down in a declining market.
(4) Other technical indicators working in a trending market: From our study of other technical indicators such as RSI and moving
average crossover system on the TASI, we can conclude that these indicators work well only when the TASI is trending.
Strategy: While the technical indicators work, they have proven to be effective for confirming a trend. Before increasing
or reducing exposure to the market, it is wise to confirm the trend using technical analysis such as RSI and Moving
Averages.
1
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AGM - Head of Research
Analyst
Abdullah Alawi
Jassim Al-Jubran
[email protected]
+966 11 2256250
[email protected]
+966 11 2256248
Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
Key Themes and Analysis
(1) Calendar Anomalies
A calendar effect refers to the trend of any market performance or economic effect in a special date/month, which is applicable
globally. Some of the anomalies include the distinct performance trend of stock markets on different trading days of the week,
different times of the month, and different times of the year (seasonal tendencies). Some of the most popular calendar effects
prevalent globally include the weekend, day-of-the-week, turn-of-the-year, and January effects.
Day-of-the-Week Effect
The day-of-the-week effect indicates that returns vary on different trading days during a week and that some days outperform
the others. We analyzed the TASI’s performance on different trading days of the week over the data set from 2009–14 to check if
this effect is applicable for Saudi stock market. The Saudi stock market’s trading days were from Saturday to Wednesday (Saturday
being the first and Wednesday being the last trading day) until June 2013; thereafter, they changed from Sunday to Thursday.
Weekend Effect: The weekend effect refers to the tendency of stock markets to underperform on Mondays (usually the first
trading day), suggesting that closing prices on Monday are lower than those on the previous week close price1. The weekend
anomaly refers to this phenomenon of returns on Monday being consistently lower than every other day of the week. However,
in Saudi Arabia, the TASI’s performance has been an outlier to this trend. The Saudi markets would rise on Sunday (first day of the
week), indicating that the closing price of Sunday is higher than that of Thursday (the last trading day).
Figure 4: Average TASI Performance on Each Trading Day
80%
30%
70%
25%
20%
15%
50%
10%
40%
5%
30%
0%
20%
- 5%
10%
- 10%
P e rc e n ta g e (% )
P e rc e n ta g e (% )
60%
- 15%
0%
1s t d ay
2nd d ay
%
3rd d ay
o f P o s itiv e d a y s
4th d ay
%
5th d ay
A v e ra g e C h a n g e
Source: Bloomberg, AlJazira Capital
One of the factors driving positive returns on the first trading day in Saudi markets could be related to the fact that around 90% of traders
are retail traders in Saudi Arabia, which make trading short term, i.e. not more than a week, especially since the market is long only (short
selling is not available).
Figure 5: Average TASI Return for the Week
No. of Positive Days % of positive Days
1st day
2nd day
3rd day
4th day
5th day
162
122
125
124
144
68.07
50.83
51.87
51.45
60.25
No. of Negative
Days
% of Negative
Days
Total Return (%)
76
118
115
117
95
31.93
49.17
47.72
48.55
39.75
63.14
0.89
5.19
-28.24
16.94
Source: Reuters Eikon
1.
2
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Source: investopedia Website - http://www.investopedia.com/terms/w/weekendeffect.asp
Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
The first trading day of the week provides the highest total returns at 63.1% for the period of 162 days. Furthermore, the proportion
of positive first trading days stood at 68.07%. It is followed by the fifth day (last trading day of the week), with the proportion of
positive days at 60.3% despite providing aggregate returns of just 16.9%.
In return, the index performs the worst on the fourth trading day of the week, providing returns of -28.2%. Furthermore, the
proportion of negative days is 48.6%. The worst performer based on the proportion of negative days (49.17%) is the second trading
day (currently Monday, earlier it was Sunday).
Conclusion
With all other parameters remaining constant, we conclude that the first trading day provides the best returns in the week, on
average, in the Saudi stock market, both in terms of number of positive days and aggregate percentage returns. In contrast, the
worst performer in terms of aggregate returns is the fourth trading day, while the second day provides negative days for most
instances.
Month-of-the-Year/Holiday Effect
We analyzed monthly market returns over the past 10 years and found that a trend exists, indicating as to which months are more
profitable than others in the Saudi stock market. We assessed the monthly returns from 2003–14 to find if there was an apparent
difference by month. Our analysis showed the ‘January Effect’ appears to be, in practice, not significantly apparent in the Saudi
market. The January Effect refers to the phenomenon where stocks illustrate a trend to perform better than average during the first
month of the year. This effect is due to many investors selling a part of their equity portfolio before the end of the year to claim a
capital loss for tax purposes1. However, when the tax calendar rolls over to a new year on January 1, these investors reinvest their
money in the market, leading to a rise in stock prices. However, as there is no tax on capital gains in Saudi Arabia, this effect is not
seen in Saudi Arabia.
Figure 6: Average Monthly Tadawul Performance (Past 10 years)
5.0%
4.0%
Decem ber
Novem ber
Augus t
- 2.0%
October
July
June
May
April
- 1.0%
February
0.0%
March
1.0%
Septem ber
2.0%
January
P e rc e n ta g e (% )
3.0%
- 3.0%
- 4.0%
- 5.0%
Source: Bloomberg, AlJazira Capital
In the Saudi stock market, the monthly returns in December are the highest at 4.0%, on average, over the past 10 years. Furthermore,
the proportion of positive monthly returns in December stood at 63.6%. December is the month when the Saudi government
usually comes out with its budget. We believe that, this has acted as a big driver for the index as market expectations for the budget
in the past few years has led to the rally in the month of December. April provided the second-best average monthly returns of
3.9%, and the proportion of positive returns stood at 90.9%.
Based on our historical analysis (as displayed in the above chart), during the month of October, the market witnesses 10-yr average
monthly negative returns of -4.1%, followed by -3.4% in March.
in other words, buying towards the end of March and October bares good returns for the investor on the short and medium runs,
as market performance is usually negative during these periods, while the market’s best performance is usually during April and
December, thus it is considered as good opportunities to exit and avoid entry.
. Source: Investopedia Website - http://www.investopedia.com/terms/j/januaryeffect.asp
1
3
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Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
Figure 7: Average Monthly Performance
Month
January
February
March
April
May
June
July
August
September
October
November
December
% of Positive Months
% of Negative Months
% Average Change
63.6%
81.8%
27.3%
90.9%
54.5%
54.5%
54.5%
72.7%
54.5%
27.3%
54.5%
63.6%
36.4%
18.2%
72.7%
9.1%
45.5%
45.5%
45.5%
27.3%
45.5%
72.7%
45.5%
36.4%
0.8%
3.6%
-3.4%
3.9%
1.8%
2.9%
-2.1%
1.2%
-0.9%
-4.1%
2.6%
4.0%
Source: Reuters Eikon
To analyze the impact of holidays on the Saudi Stock Exchange, we considered the month of Ramadan. The Ramadan Effect
establishes the impact of the holy month of Ramadan on the stock market’s performance. Our study establishes that returns are
higher with lower volatility in Muslim countries during the month of Ramadan. We analyzed the data over the past 10 years and
found that there is a positive and significant relationship between market movement and Ramadan. In Ramadan, majority of the
people follow spiritual principles, with a significant portion of their time being spent on spiritual rituals, along with a change in
business hours to accommodate the requirements of the holy month.
Figure 8: Ramadan Impact on Tadawul Performance
Average One-month Return
TASI
Banking
Petrochemical
Cement
Retail
Energy & Utilities
Telecom
Building & Const
Real Estate
Hotel
Before Ramadan
During Ramadan
After Ramadan
-0.3%
1.0%
-1.2%
-1.5%
-0.1%
-0.2%
-2.1%
-3.5%
-1.7%
-2.8%
1.6%
2.8%
0.1%
0.3%
0.3%
1.0%
2.6%
-1.4%
0.2%
-0.4%
1.2%
3.3%
2.3%
-0.1%
0.5%
3.6%
1.2%
1.3%
0.5%
2.2%
Source: Reuters Eikon
We analyzed the data from 2000–14 for Tadawul (Saudi Stock Exchange) and 2008–14 for sector indices. The table represents onemonth returns of Tadawul and other sector indices before, during, and after the month of Ramadan. Our analysis indicates that the
sectoral performances vary for the three periods under analysis:
Before Ramadan: In this period, people generally spend more to shop for the upcoming festival. Hence, as per our analysis, more
number of people exit the market for money, leading to fall in the indices. Historically, Building & Construction is the worst affected
of all as there is less construction during this period.
4
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Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
During Ramadan: Ramadan is a period where the trade volume is generally low as less people invest in the market except
Ramadan 2014 when foreign investors decision was made. Hence, most of the sectoral indices are flat.
After Ramadan: This is a period where we can see most of the sectoral indices rallying and market dynamics taking over there on.
Historically, the Energy sector has been the top performer, followed by banking and petrochemical sectors.
Figure 9: Tadawul Performance: Ramadan Impact
20.0%
B e fo re
D u r in g
A fte r
10.0%
- 10.0%
400
- 20.0%
300
- 30.0%
200
100
2004
2005
2006
2007
2008
2009
2010
A v e r a g e V o lu m e D u r in g
A v e r a g e V o lu m e B e fo r e
2011
2012
2013
A v e r a g e V o lu m e A fte r
M illio n S h a r e
P e r c e n ta g e (% )
0.0%
0
2014
Source: Bloomberg, Reuters Eikon
(2) Effect of Valuation on Market Performance
Valuations tools such as price-to-earnings (PE) multiples are used by investors and analysts to help determine if individual stock/
stock market index is reasonably priced. PE ratio is a ratio of share prices to earnings. The PE ratio of a stock is equal to the price of
the share divided by per share earnings of the stock.
The PE cycle is dependent on the inflation rate, which leads to loss of purchasing power and erosion of capital, and has an important
bearing on the investors. During periods of high inflation, investors want higher returns to offset for potential loss of portfolio value;
hence, investors would prefer paying a lower price for future earnings to obtain higher returns from stocks, translating into lower
PE. Consequently, a higher inflation period is usually followed by lower PE and declining inflation leads to higher PE for the market2.
Figure 10: Actual PE vs. TASI’s Performance
P E (x )
T A S I - P o in ts
35
15, 000
30
13, 000
25
11, 000
20
9, 000
17
15
7, 000
10
T A S I
P E
7/ 27/ 2014
4/ 27/ 2014
1/ 27/ 2014
7/ 27/ 2013
10/ 27/ 2013
4/ 27/ 2013
1/ 27/ 2013
7/ 27/ 2012
10/ 27/ 2012
4/ 27/ 2012
1/ 27/ 2012
7/ 27/ 2011
10/ 27/ 2011
4/ 27/ 2011
1/ 27/ 2011
7/ 27/ 2010
10/ 27/ 2010
4/ 27/ 2010
1/ 27/ 2010
10/ 27/ 2009
7/ 27/ 2009
4/ 27/ 2009
1/ 27/ 2009
7/ 27/ 2008
10/ 27/ 2008
4/ 27/ 2008
1/ 27/ 2008
7/ 27/ 2007
10/ 27/ 2007
4/ 27/ 2007
1/ 27/ 2007
0
7/ 27/ 2006
3, 000
10/ 27/ 2006
5
4/ 27/ 2006
5, 000
Source: Bloomberg, AlJazira Capital
We conducted an analysis of the TASI’s performance and index PE data over the last eight years (due to limited availability of PE
data). The stock index PE ratio is computed by considering the average share price of all listed companies, and is divided by the
average earnings per share of these companies. The results indicate that a low PE ratio is usually followed by an increase in market
performance in the subsequent period and a high PE ratio by slow growth in stock prices. Furthermore, when high PE ratios reduce
the earnings yield on stocks relative to returns on other investments, the short-term stock market performance is impacted. Our
analysis shows that the average PE for the period under study is 17.13x, and the observed market performance shows a mid-term
opportunity to enter when PE is below the average, as the entire market has risen substantially during 2007, 2009 and 2013.
However, it was clear that once PE reached 24x, the market has subsequently corrected and encountered a sharp fall in share prices.
5
. Source:Investopedia Website - http://www.investopedia.com/ask/answers/123.asp
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Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
(3) Volume indicator at Tops and Bottoms in the market movement:
Volume is an important indicator for market fundamentals and indicates if the market fundamentals are supporting the trend.
A significant rise in volume coming into the market usually follow the fact that the buyers have become aggressive and have taken
up positions with the expectation that the rise would be substantial, eventually, our study show that we are in an accumulative
phase, which is typically followed by a profit taking and a price earning of TASI.
Figure 11: Volume for TASI (Weekly data)
7.000
6620.75
6.500
6.000
5500
5000
4.500
4000
B
A
Mar
Jun
2009
2B
A
A
Sep
Dec
B
Mar
Jun
1B
2010
Sep
Dec
360.784M
0
20
Source: Reuters Eikon
Figure above shows the TASI’s returns from 2009–10. At point A, volume increases with price and is highest at the top. Thereafter,
the index starts correcting. In all three examples of an uptrend in the above chart, volume increases with price.
Figure 12: Volume for TASI (Weekly data)
11062.37
10.000
9000
8000
7000
6000
B
A
A
B
A
4B
3B
2B
1.042B
2011
2012
2013
2014
0
Source: Bloomberg
Figure above depicts the TASI’s returns from 2011–14. At point B, volume decreases as the index corrects and is lowest at the
bottom. Moreover, other examples show a similar trend.
Conclusion
As observed from the two Figures above, volume traded on the TASI is in line with the index trend; it increases with the index and
is progressively lower when the index corrects. The highest volume is recorded near the top and the lowest is at the bottom, as
observed from points A and B.
6
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Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
(4) Other Technical Indicators
RSI on weekly chart:
RSI is a momentum indicator that validates the strength of the trend. In addition, it can be used as an overbought/oversold indicator.
RSI oscillates between 0 and 100, and is a bounded oscillator. Generally, a reading below 30 is known as an oversold reading and
that above 70 is known as an overbought reading. However, one drawback of using this indicator is that it is a lagging indicator.
Figure 13: RSI Entry and Exit Points (Weekly data)
Buy Signal
A
F M A M
J
1Q 2007
2Q 2007
J
3Q
A
B
S O N D
2007
4Q 2007
J
1Q
F
J
M A M
J
2008
2Q 2008
3Q
A
A u to
Buy Signal
Sell Signal
S O N D
2008
4Q 2008
Z ero L ine
J
1Q
F
M
2009
A
2Q
J
M
2009
11.000
10.500
10.000
9.500
9.000
8.500
8.000
7.500
7.000
6.500
6.000
5.500
5.000
4.500
4.000
V a lu e
S A R
70
60
50
40
30
A u to
J
3Q
A
S O N D
2009
4Q 2009
Source: Reuters Eikon
Figure above shows the TASI weekly chart (from 2007–09) with RSI indicator. The red line is the overbought line at 70. The green
line is the oversold line at 30. The purple line is drawn at 50. A buy signal is generated when RSI crosses 50 from below and a sell
signal is generated when RSI crosses 50 from above.
The first buy signal is denoted by A in 2007, from where the market rises until early 2008. The first sell signal is generated at point
B when RSI crosses below 50 in the middle of 2008 and continues until early 2009.
Figure 14: RSI Entry and Exit Points (Weekly data)
P r ic e
S A R
10 . 0 0 0
9.500
9.000
8.500
8.000
7.500
7.000
6.500
A
J
4Q
F M
2010
B
A M
1Q
2011
J
J
2Q
A
S O
2011 3Q
N
D
2011 4Q
J
F M
2011 1Q
A M
2012
J
2Q
J
A
S O
2012 3Q
N
2012 4Q
D
J
F M
2012 1Q
A M
2013
2Q
J
J
A
2013 3Q
J
S O
2013 4Q
N
D
2013
1Q
F M
2014
A M
2Q
J
J
2014 3Q
A
S
6.000
5.500
A u to
V a lu e
S A R
6 0
4 0
20
A u to
2014
Source: Reuters Eikon
Figure above shows the TASI weekly chart (from 2010–14) with three buy/sell signals. Point A depicts a sell signal when RSI crosses
below 50. Similarly, point B indicates a buy signal, with RSI crossing 50 from below.
Conclusion
Studying the historical RSI data on TASI (data from 2008 until date has been used for the study), we observe 60 entry points, 15
positive trades, and 45 negative trades. The aggregate gain stood at 20,849.35 and the average return per trade is 347.48 points.
We conclude that any investor following the RSI method to invest in the TASI would have obtained positive returns on the medium
to long term.
7
© All rights reserved
Exploiting Market Anomalies
in the Saudi Stock Market
September 2014
Strategy report
Please read Disclaimer on the back
Moving averages study
A moving average is a smoothed trend line of a predetermined period. It can be used to generate buy and sell signals. A buy signal
is generated when the short-term moving average crosses the longer-term average from below. On the other hand, a sell signal
is generated when the short-term moving average crosses the longer-term average from above. However, one drawback of using
this indicator is that it is a lagging indicator. (we choose daily points to increase the data points in our analysis).
Figure 15: Moving Average Crossover (Daily data)
P r ic e
S A R
Sell Signal
9.400
9.300
9.200
9.100
9.000
8.900
8.800
8.700
8.600
8.500
8.400
8.300
8.200
8.100
8.000
7.900
7.800
7.700
7.600
7.500
7.400
7.300
7.200
7.100
7.000
6.900
6.800
6.700
6.600
B
Buy Signal
Buy Signal
A
Buy Signal
6.500
29 05 12 19 26 05 12 19 26 02 09 16 23 30 07 14 21 28 04 11 18 25 02 09 16 23 30 06 13 20 27 03 10 17 24 01 08 22 29 05 12 19 26
Feb 2007
Mar 2007
Apr 2007
May 2007
Jun 2007
Jul 2007
Aug 2007
Sep 2007
Oct 2007
V olum e
40M
38M
36M
Auto
Nov 2007
Source: Reuters Eikon
Figure above depicts the daily chart of the TASI with two moving averages, faster moving average (13-day EMA) and slower moving
average (21-day EMA).
The first buy signal is generated in Feb 2007, shown as point A; the short-term moving average (red) crosses the longer-term
moving average (blue) from below. It provides a decent rally before a sell signal is generated in March 2007.
The signal is not confirmed until the close of the candle, suggesting that the actual entry would be within the next candle. We have
considered the opening of that candle for calculating returns. Daily data from 2007 until date have been used for analysis.
Figure below shows some more entry points based on the Moving average cross over system.
Figure 16: Moving Average Crossover (Daily data)
11.080
Sell Signal
10.000
Buy Signal
Sell Signal
9.000
8.000
Sell Signal
Buy Signal
3Q 2012
Buy Signal
7.000
Buy Signal
Buy Signal
4Q 2012
6.000
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
259.005 M
0.00
Source: Reuters Eikon
Conclusion
Since 1998, 126 crossovers occurred on the daily chart, with 42 positive trades and 84 negative trades. The failed trades occurred
due to a sideways market, as this strategy works well in a trending market. However, this method provides an aggregate return of
13,365 points. The sum of the returns is 228% and rebased return is 551.73% (based to 100). This is a trend following system; hence,
it would work better when the TASI is trending in one direction.
8
© All rights reserved
Exploiting Market Anomalies
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September 2014
Strategy report
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Composite Technical Analysis:
As evident from the figure below, RSI at point 1 crosses 50-Mark and generates a buy signal, at the same time the smaller moving
average (13-day) crosses the longer average (21-day EMA). Thus a buy signal is generated almost simultaneously by the RSI as well
as the moving average system. Such signals which are confirmed by multiple indicators are more reliable.
Figure 17: Moving Average along with RSI (Daily data)
Sell Signal
11.000
10.000
9.824
B
9.318
9.000
Sell Signal
Sell Signal
Sell Signal
Buy Signal
A
8.000
Buy Signal
Buy Signal
7.000
80
60
2
1
Feb 2007
April 2007
May 2007
Jun 2007
July 2007
Aug 2007
Sep 2007
Oct 2007
Nov 2007
37.673
Dec 2007 Jan 2008
Feb 2008
Mar 2008
Source: Reuters Eikon
In the figure below; at point 1 we can see how a sell signal is generated by the moving average system and the RSI system. The
volume confirmation is also obtained at the same time, thus giving a better sell signal. Similarly at point 2 and 3, all the three
indicators give sell and buy signals at approximately the same time.
Figure 18: Moving Average and RSI along with Volume (Daily data)
11.080
Sell Signal
2
10.500
3
10.000
9.500
Buy Signal
Sell Signal
1
9.000
8.500
8.000
7.500
Buy Signal
7.000
2
1
80
65.5528
3
1
2
July 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014
40
20
3
Jul 2014
Aug 2014
0.5 B
277.304 M
0
Source: Reuters Eikon
What is the outlook for TASI now? (22/9/2014): Depending on the report’s strategies, the daily charts show that there is a failure
of TASI (Tadawul All Share Index) on 21/09/2014 to maintain above the slower moving average (21-day EMA) at 11050 points after
drawing a bearish candlestick formation, which demonstrates that the last week rebound was a small bullish wave in a downtrend.
However, the moving averages of (13-day EMA) and (21-day EMA) are still in a positive position due to the lagging in this indicator
to signal an early exit. Moreover, Daily RSI started to decline in overbought territory and breaking the substantial level of (70) on
15/09/2014, which supports the corrective view, in conjunction with the decline in the trading volumes (lack of buying interest)
after reaching their highest levels on 27/08/2014. Daily MACD line is below the signal line suggesting the upside is capped. Hence,
traders are advised to be cautious, as the index could continue to correct if it trades below the current level. In the other words, TASI
could find support at 10751 and 10498 points, respectively. According to the statistical results of this report, we expect that the
end of October may be a good level to open new positions if it coincided with the stated support points and returning of moving
averages and volume levels to the constructive side and take your profits later in December.
9
However, the long-term trend could remain positive as long as the index sustains above the moving averages of (13-month EMA)
and (21-month EMA). The index is trading above its upward sloping trend line, suggesting long-term bullishness is intact and the
possibility of a short-term correction cannot be ruled out.
© All rights reserved
RESEARCH DIVISION
BROKERAGE AND INVESTMENT
CENTERS DIVISION
RESEARCH
DIVISION
Senior Analyst
Analyst
Abdullah Alawi
Syed Taimure Akhtar
Sultan Al Kadi
+966 11 2256250
[email protected]
+966 11 2256146
[email protected]
+966 11 2256374
[email protected]
Senior Analyst
Analyst
Analyst
Talha Nazar
Saleh Al-Quati
Jassim Al-Jubran
+966 11 2256115
[email protected]
+966 11 2256046
[email protected]
+966 11 2256248
[email protected]
General manager - brokerage services and sales
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment Centers & ADC
Ala’a Al-Yousef
brokerage
Brokerage
+966 11 2256000
[email protected]
Luay Jawad Al-Motawa
Abdullah Q. Al-Misbani
+966 11 2256277
[email protected]
+966 12 6618400
[email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
AGM - Head of Institutional Brokerage
Central Region
Abdullah Al-Rahit
Samer Al- Joauni
Sultan Ibrahim AL-Mutawa
+966 16 3617547
[email protected]
+966 1 225 6352
[email protected]
+966 11 2256364
[email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and
operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct
securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory,
and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied
the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira
Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and
International markets, as well as offering a full suite of securities business.
1.
RATING
TERMINOLOGY
AGM - Head of Research
2.
3.
4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target.
Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels
over next twelve months.
Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target.
Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve
months.
Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks
rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve
months.
Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further
analysis of a material change in the fundamentals of the company.
Disclaimer
The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for
any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation
to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake
risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on
his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or
microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face
some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by
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