اللون الأحمر يخيم على السوق السعودي وسط تباين في أداء القطاعات وسيولة ضعيفة

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00:00Today, Al-Muammar is losing more than 3%. We are closing at 147 Riyals.

00:05We go directly to Riyadh, Mr. Mohamed Al-Omran, President of the Gulf Center for Financial Consultations joins us.

00:11Mr. Mohamed, welcome to us and thank you for your presence.

00:15There are many developments today that the Saudi market may open in, its movements.

00:20Despite the decline in oil prices due to the events in Iran, the market did not respond significantly.

00:27We remain conservative at the level of 12,100 points in general.

00:31To what extent are we approaching geopolitical developments that may affect market movements, in your opinion, and leave this level?

00:40In the name of God, the Merciful.

00:42Of course, the market, in one way or another, is affected by geopolitical events.

00:48We can say that the decline that the market started about eight weeks ago was due to political events,

00:55in the first place, and specifically related to the Red Sea, despite the impact of the Kingdom in a very limited way.

01:05Even at this moment, let's not forget that the political events are not only in the Red Sea.

01:12A while ago, Iran, Gaza, etc.

01:16The Kingdom has not been affected despite all these events.

01:22But of course, the market should not be taken lightly.

01:25We have high ratings, the issue of interest rates and their great pressure is pressuring the markets.

01:40Despite this, the market was able to maintain high growth rates,

01:46and in terms of losses, the profit margin began to improve relatively,

01:51especially in this period.

01:54We started to achieve good results, I think,

01:58and therefore, the market is now very much aware of the issue of reducing interest rates,

02:06which is expected to be implemented by the US federal government in two or three months,

02:12and as it happened, on the contrary, we will see an acceleration in the growth of interest rates,

02:18the growth of interest rates, a great improvement in the profit margin,

02:22and therefore, we can say that the market is now, it is true that there is a decline in this decline,

02:27but it is still stable.

02:29Today, we also saw a very strong stability at the pivotal point of 12,100 points,

02:33and it closed above it.

02:35It is also positive that the value of the exchange rates has decreased by a record level.

02:39Yesterday, we were below 5 billion on the first day, despite the decline,

02:44and this shows that the sales operations may have come to an end,

02:49and we may be close to forming a bottom, really,

02:53and it began to build a upward trend, God willing,

02:56but all this is not confirmed.

02:58The real confirmation, I think, from my point of view,

03:01when we close above the level of 12,250 approximately,

03:05and it is finally confirmed when we close, God willing, above 12,400 exactly.

03:11Okay, we are at 19.

03:13The announcement of the results of the first quarter is not over, Mr. Mohamed.

03:17So far, what is your assessment of how companies deal,

03:21even after the process of lowering interest rates,

03:24and the management of financing costs during this phase?

03:30And will the second quarter be better, in your opinion,

03:33if we are still able to reduce interest rates until next September?

03:41Of course, there is no doubt that financing costs play a major role in reducing profitability.

03:48Of course, some companies were pressured to increase profits,

03:53and some recorded losses, mainly due to the increase in financing costs.

03:59In addition, of course, there are other factors,

04:01such as sales costs, operating costs,

04:06but, of course, financing costs had the biggest share.

04:10Let's not forget the issue, until now,

04:13many companies, unfortunately,

04:16despite the fact that the financing cost was much higher than the original,

04:21but unfortunately, they directed the cash flow to its origins

04:24instead of reducing the financing costs to the first degree.

04:28Of course, it was a risk, and in fact, it was a negative performance

04:33because of this part, specifically.

04:36It was supposed that companies provide cash flow to pay off loans,

04:42and not to direct it to its origins,

04:46especially since the origins do not provide a return compared to the high financing cost.

04:52Unfortunately, the direction is wrong, and with a large number of companies,

04:56I can say that maybe half of the companies in the Saudi market have committed this mistake.

05:00There is no return until now,

05:03because when we see a large reduction in interest rates,

05:09we see that the return on the origin is higher than the financing cost,

05:14and this has not occurred for at least two or three years, at least from now.

05:19Therefore, the financial management of the companies, unfortunately, was disappointing,

05:26and we still see a large demand for financing from banks,

05:31despite the fact that the return on the origin is very weak compared to the financing cost,

05:38which is twice as good, or in some cases, maybe more than that.

05:42In general, in general, leading companies are important,

05:46and leading companies have good performance, professional,

05:49professional management of financial management, especially in the banking sector,

05:53telecommunications sectors, energy, some petrochemical companies,

05:58we see that their performance was more than good,

06:01and in fact, they are the ones who lead the market at this stage,

06:05despite the situation of depression that has been going on in the market for eight weeks

06:09since we entered this path.

06:11Okay.

06:12Today, Kimanol also appointed us for the share,

06:15because it was 2% against the market movements,

06:17but it is clear that the share is benefiting from the news of the company's reduction of losses by 50%,

06:22and the complete acquisition of 80% of the world's chemical industries.

06:26Mr. Mohamed, how much will we see the impact of this acquisition on Kimanol in the next period?

06:33Is it possible for the company to turn to profitability and at least return to a point of equilibrium?

06:40It is possible, but it will take time.

06:43The company has a strategy,

06:45which is basically outside the acquisition process, which implements this strategy.

06:50But of course, the company has been suffering for a long time,

06:54and is trying to improve its financial performance.

06:59Now, as I mentioned, the company wants to improve its results by increasing the number of sales,

07:06despite the reduction in product prices.

07:09Good behavior, in fact.

07:11The market reacts positively to the company's behavior in such circumstances,

07:16despite the high risk involved in this step.

07:20But the company seems to be trying to improve its performance in any way possible,

07:25and the acquisition, of course.

07:27But of course, according to the company, it is part of a strategy that aims to improve sales

07:34and clear profits over the long term.

07:37And the results, usually, in my opinion, will not come quickly.

07:42It will take some time.

07:44We can say two or three years at least,

07:47so that we can evaluate the acquisition process from the extent of its success or failure.

07:52Sal, the company is distributing 17.6% of its profits from the first quarter of 2024.

08:06The share was one of the investors' savings and interest in it,

08:11perhaps after the merger of the MSCI index today.

08:15In your opinion, how many new groups will join Sal's share after this merger?

08:22And in terms of today's price levels and profits,

08:25is the share still tempting, in your opinion, for the transport sector?

08:30Logistic services, in fact, are witnessing a major boom in the Kingdom,

08:34and Sal is one of the most important.

08:37Of course, the merger of the MSCI index,

08:41the financial distribution, the growth in sales, the growth in profit,

08:46are all major factors in evaluating and attracting investments for investors.

08:51And Sal, in the last period, had a good share of attracting investors

08:56to such encouraging results, in fact.

09:00I would say again that logistic services are very important,

09:05a very important contributor to the transfer of economic and commercial activities in the Kingdom.

09:13Therefore, the company is trying to focus on such activities and play a leading role

09:20in light of the boom witnessed by logistic industries in the Kingdom,

09:25in light of the existence of new technologies,

09:29as is known in the industrial sectors, in the individual sectors.

09:34Logistic services certainly played a major role in these developments that we have seen recently.

09:41Thank you, Mr. Mohamed.

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