Saudi investors have boosted their exposure to the stock market in recent weeks, with the value of shares purchased at the Saudi Stock Exchange (Tadawul) increasing by more than a third in one month.

During the whole month of August, investors in the kingdom purchased shares worth 135.58 billion Saudi riyals ($36 billion) at the “main market”, up by 32 percent over the previous month.

The acquired shares by Saudi citizens represent a huge chunk (90.14 percent) of the shares purchased during the period. Shares held by the locals so far also represent 97.4 percent of the total market capitalisation, Tadawul said in a report.

Overall, the total value of shares traded on the stock exchange for the month ending August 31, 2020 amounted to 150.41 billion, rising by 35.02 percent over a month earlier.

Other investors

Among the GCC investors, the value of shares purchased amounted to 0.95 billion riyals, representing 0.63 percent of total buying activity.

Foreign investors acquired 13.87 billion riyals worth of shares, representing 9.22 percent of the total buying activity. Total ownership of foreign investors stood at 2.14 percent of total market capitalisation as of August 31.

The Saudi stock market had a positive performance in recent weeks, with the Tadawul TASI rising by 6.5 percent, the highest monthly increase in four months.

The stock exchange has recently rolled out for the first time the derivatives market and unveiled the first batch of derivatives product called MT30 Index Futures.

Not the best since lockdown

However, August isn’t the best month since the lockdown for stock buying activity among Saudi investors.

The stellar month so far for buying shares is June, which saw Saudi nationals bought a whopping 361.02 billion riyals in shares. The total value of shares traded for the same month also reached 380 billion riyals, the highest so far since coronavirus restrictions started to ease.

April was one of the worst months, with total value of shares traded amounting to just 95.59 billion riyals. Saudi investors also acquired shares worth 84.9 billion riyals in April, which is nearly 40 percent lower than what was recorded in August.

(Reporting by Cleofe Maceda; editing by Seban Scaria)

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© ZAWYA 2020