The Tadawul All-Share Index (TASI) remains in a fairly gloom mood. Unlike the thermometer reaching record heat level the equity market’s brief mini-rally however cannot energize the investor’s investment psychology.

It seems all the world equity markets are entering their summer malaise and are living up to their historical reputation for seasonal weakness. It is difficult to identify a stage of equilibrium with so much uncertainty in the world economy. Sentiments do not focus on the positive aspect of the news; oil price fall, argument if inflation is a threat or not, and actions undertaken by various monetary authorities around the world has not been able to slow the global economy. Once again risky assets are being sold and safe heavens are being sought.

The Saudi economy is projected to grow at a high single digit during the next 5 to 10 years. Both the private sector and the public sector are looking forward to very large-scale development projects. Some of these projects have already been announced. Now consider these projects here in the Kingdom, what is happening around the world: the GCC region, China, India, Brazil, Russia and other emerging markets.

The emerging markets are all embracing high single digit growth. To sustain the economic boom one has to look at the underlying commodities required to fuel their growth.

Oil, steel, copper, coal, aluminum and the list goes on. Look at major financial newspapers headline, “Accelor agreed to be bought by Mittal for $33.83 billion. The deal would create the world’s largest steelmaker, with more than 10 percent of global market”, or “ Phelps plans to buy Canadian mining powerhouse Inco and Falconbridge in a deal valued around $40 billion, in a huge bet that the current metals boom will far outlast the industry’s previous cycles”.

These facts clearly indicate opportunities in the equity market here in the Kingdom. Investors will need to do research and see out professional help to put their money to work.

With the TASI around 12,000, there are plenty of good buying opportunities for long-term investors. A holding period in excess of 5 years with low single digit return is highly probable in companies associated with infrastructure development. Commodities related industries are expected to provide similar returns over the next 5 to 10 years.

The Kingdom’s membership in the WTO will put pressure on the financial sector and will be reflected on the earnings of the companies in this sector.

International financial institutions are already starting to establish a footprint here; with time they will compete for larger market share and putting pressure on pricing which the local institutions have enjoyed for some time.

All there positive developments for the capital market in the long run as the market matures and its activities are accepted by the world financial markets and institutional investors. WTO membership will help embrace proper corporate governance and financial standards which ultimately will provide a good breeding ground for long-term sustainable economic development.

This sustainable stability is what the investors are looking forward to, thereby ensuring participation in the equity market with confidence. In the mean time there do exist real investment opportunities within the TASI. The importance is in research. In the mean time do not pay attention to rumors, as they are rumors and will always remain rumors.

(Faisal Alsayrafi is president & CEO of Financial Transaction House.)