Will the Scenario be Re-enacted, Unleashing the Stock Exchange 2nd Boom?

Following stc secondary IPO, announcement, a retrospective overview 

Offering of as much as 30% of the shares of the Saudi Telecom Company “stc” in January 2003, was the initial spark for a robust, rigorous and wild boom, in the Saudi stock exchange, that last for 3-year, resulting too, in the main index of the exchange rise to 14,194.56 points, or 563.71%, as the index has ended the Year 2002, at a level of 2,518.08 points, while it finished 2005, at the level of 16,712.64 points.

Such a price boom was accompanied by a surge in trading values, amounting to SR4.14 trillion in 2005, which is the second highest annual trading value, ​​in the history of the market, as it hit as much as SR5.26 trillion in 2006, but it was accompanied by a decline in prices

Average trading value ​​surpassed the value realized, in 2005 at SR13.81 billion, to SR19.86 billion in 2006, before it began to decline in 2007 to settle at SR10.31 billion.

All in all, these were very large and indeed big numbers, if compared to their counterparts, in so many markets, at the time.

During the current year, it is noticeable that we began to approach numbers and figures posted in 2005-2007 once again, as the average daily trading values, ​​up to December 6 session have exceeded SR9 billion, which is higher than last year’s SR8.32 billion, and the index rose by 26.83%.

That is the highest for the index since 2009 (if we consider this rise as a measure of the general index’s position, during the whole year), when it rose by 27.46%.

Evolution of the financial market performance, between the initial and secondary offering, of the stc

The market has experienced, during the offering and listing of the “stc” stock, at the time, talks of the big and the small.

Rather, it has compelled the whole, to follow as daily position of the Saudi index, due to the large volume of numbers of daily trading.

Today, after the company itself announced the secondary offering of part of its shares, it is noted that there are signs of the possibility of a second

Among the positive indications that support the market’s technical and theoretical achievements, is that a lot of legislations have been enacted, during the past few years, in addition to the use of the latest and easiest tools, techniques and outlets, which prompted the market to occupy advanced position, among regional and global markets, putting the market in the focus of attention of local and foreign investors, alike.

In addition, the country’s ongoing bold achievements, at the economic level, have ranked it atop, in many aspects globally, with expectations of continued growth, in the country’s economy, where expectations indicate a significant increase in economic rate of growth to reach 7%, grace to a significant increase of the oil prices, as well as the strong growth levels for the non-oil sector.

The Kingdom is also expected to record a surplus of as much as SR35 billion in 2022, a year earlier than the current estimates of the Ministry of Finance, and that would be the first surplus, in as long as 8-year, since 2013.

Among the positive indicators, too, is the successive rise in the number of individual investors, in the market, as 84.96 thousand new investors entered in the third quarter of the year, while 31.6 thousand entered in the second quarter, against 43.34 thousand new investors who have entered in the first quarter. That means the curve is increasingly increasing.

Despite the fact that we are still facing the Coronavirus pandemic that negatively affected everyone.

The position of the market indices, in spite of the large size of the companies listed, indicate that the pandemic impact, is fading away little by little.

The main index of the market, also despite being affected like other indices around the world by the frequent news about the new mutant strain “Omicron” variant, started the current week with a rise of 2.39%, gaining 259.68 points (the highest pace in 30 weeks)

And even if it lost part of it, later on (121 points), however, after oil started trading this week with a rise of more than 2%, the market is expected to resume the rise, and this fluctuation may continue until the vision becomes clear to individual investors, regarding new mutation developments and subsequently the market volatility and concerns.

Source: Tadawul, stc financial statements, Maaal follow up unit