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Jeddah - Yasmine El Tohamy - RIYADH: International investors made a huge comeback into the Saudi Stock Exchange, or Tadawul, as they infused SR12.7 billion ($3.7 billion) in the first two weeks of November.
According to Tadawul, foreign ownership increased in 111 companies listed on the Saudi exchange in the first two weeks of November.
The rally came as a surprise as foreign investors sold shares worth SR26 billion in October, fearing market uncertainties due to the escalation of the Israel-Hamas war.
Etihad Atheeb Communications was one of the biggest beneficiaries as foreign investors picked up 85,405 shares in November, increasing their stake to 3.26 percent from 2.9 percent in October.
However, the spotlight was on the insurance sector as three companies saw some decent buying.
In the last five days, foreign ownership in Al Sagr Cooperative Insurance Co., Malath Cooperative Insurance Co., and United Cooperative Assurance Co. jumped 0.36 percent, 0.76 percent and 0.21 percent, respectively.
However, international investments decreased in 48 companies so far in November.
For instance, the foreign ownership in Maharah Human Resources Co. decreased by 0.41 percent to 5.80 percent.
Other companies that witnessed an outflow in the first two weeks of November were Al Mawarid Manpower Co. and Saudi Enaya Cooperative Insurance Co., which saw a decline of 0.33 percent and 0.22 percent, respectively.
“Capital flight can be quite indiscriminate. It’s not necessarily 100 percent based on the fundamentals of each country. And so, obviously, there’s a perception that risks are increasing throughout the region. And we’re seeing a negative impact as a result of that,” said Torbjorn Soltvedt, principal analyst for the Middle East and North Africa with Verisk Maplecroft, told Reuters.
Despite geopolitical tensions, Saudi Arabia’s main index, the Tadawul All Share Index, continued its upward trend on Nov.15. The index closed 165.79 points higher to 11,022.89, while the parallel market, Nomu, also edged up 332.52 points to 23,129.38.
Earlier this month, Saudi Arabia’s Investment Ministry revealed that foreign direct investments to the Kingdom amounted to SR122 billion in 2022, thus placing the nation in the 10th rank among the G20 economies last year.
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