Riyadh - Mubasher: After reaching multi-year lows between August and September 2016, the Saudi Stock Exchange’s (Tadawul) traded value increased to hit an eight-month high in December 2016.

The Saudi market gained 28% during that period, Al Rajhi Capital said in a recent report.

Saudi mutual funds’ aggressive net buying, especially the private funds’, seems to be one of the key factors driving activity during this period, along with an improved sentiment on the back of the Kingdom’s successful international sovereign bond issue and budget announcements, it added.

Tadawul data of SAR 36.5 billion net buying by Saudi mutual funds in the fourth quarter of 2016 coincides with an increase in private fund assets to the tune of SAR 34.9 billion during the period reported by the Capital Market Authority (CMA).

To put things into perspective, Saudi mutual fund net buying in Q4-16, with an average SAR 2.75 billion per week, was more than seven times higher than that of the levels witnessed over the preceding four quarters, from Q4-15 to Q3-16, with an average of SAR 0.4 billion per week.

“However, mutual fund activity has normalised in January and February 2017, with Saudi mutual fund net buying at SAR 0.38 billion per week, in- line with historical averages,” noted the report.

“Overall, it seems that the strong buying activity led by private funds in Q4-16 was the key driver for Tadawul All Share Exchange (TASI), which rose during this period from nearly 5,600 levels at the end of September 2016 to the levels of 7,200 points at the end of December 2016,” Al Rajhi Capital indicated.