‎Analysts expect rise in interest rates to impact markets, government spending to reflect positively

‎Analysts expect rise in interest rates to impact markets, government spending to reflect positively

The rise in interest rates affected the movement of Saudi capital market and global markets, making them more volatile, analysts told Argaam.

On the sidelines of the Financial Sector Conference Talks 3 (FSC Talks 3), analysts said that investors are now looking for assets with returns, and the sukuk market is a great pick. They also noted that the Saudi market is expected to benefit from government spending.

Market Conditions

Saudi market has priced sectors well on the changes taking place, as it is currently looking for new opportunities, said Mazen Al-Sudairi, Head of Research at Al Rajhi Capital.

Profit of the Saudi petrochemical sector is expected to face some headwinds over the coming three to six months. This is because the Saudi capital market is interconnected to the global markets, which are currently under pressure — especially the Chinese economy.

Mohammed AlShammasi, CEO of Derayah Financial, stated that the interest rate hikes contributed to global markets’ changes and fluctuations, including the Saudi market, which led to a search for more opportunities in less risky instruments with healthy returns.

“Market reflects economic performance,” AlShammasi pointed out, explaining that Saudi companies are maintaining profitability. Initial public offerings (IPOs) for government-owned corporations and family businesses still reflect excellent