JEDDAH: The Saudi stock market, which has gained nearly 9 percent so far this year, is expected to further improve its performance in 2015, say regional economists.

“We still expect the Saudi index to perform postively this year, but we think that a lot of the excitement earlier this year was unfounded,” Francisco Quintana, head of research at Asiya Investments, told Arab News.

He was reacting to the 2.4 percent loss suffered by the Tadawul All-Share Index (TASI) on Monday.

The index fell by 221.64 points to 9,080.02, its biggest daily drop in four months.

The value of traded shares exceeded SR5 billion on Monday.

“The Saudi economy is diversified by GCC standards but still largely dependent on oil. Low oil prices are weighing on investor sentiment,” said Quintana.

Basil Al-Ghalayini, CEO of the BMG Financial Group, commented: “The sharp decline in oil prices had its negative impact on TASI with the petrochemical sector (3.63 percent decline) taking the lion’s share of the Tadawul plunge.”

Heavyweight Saudi Basic Industries Corp. (SABIC) tumbled 4.3 percent to SR94.75 on Monday after NBK Capital downgraded the stock to “hold” from “buy” and said its earnings had most likely peaked for the short term.

Reuters reported that Saudi International Petrochemical Co. (Sipchem) tumbled 8.9 percent to SR29.20 in the heaviest trade since early May after announcing its quarterly profit had fallen 55 percent to SR110.1 million. Analysts surveyed by Reuters had expected SR133.3 million.

The stock broke technical support at SR31.00, its lows since mid-May, triggering a bearish right triangle pointing down to the March and April lows around SR26.00.

National Industrialization Co. (Tasnee) dropped 3.3 percent, having swung to a net loss for the second quarter.

“The market will take its cues now from oil prices and global markets direction,” said John Sfakianakis, Middle East director at Ashmore Group.

Speaking to Arab News on the market outlook, Sfakianakis added: “Continuous negative global lead, China’s fall and weak oil prices are affecting markets in the region as TASI witnessed a huge selling pressure.”

Commenting further on Saudi stocks, Francisco Quintana of Asiya Investments added: “Expectations about the performance of the Tadawul have been really high over the last year. Investors were expecting large inflows when the exchange opened up to foreign investors, which it did in June, and they are also expecting its inclusion in the MSCI classification as en emerging market. But the timing has not been favorable.”

He added: “Low oil prices are weighing on investor sentiment. The spending capacity of the government is suffering. Also, the expectations of a hike in the US and the current volatility in China are also pushing investors back to US markets.