Monthly Report Saudi Stock Market | May 2022

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AJC Research Team

Monthly Report

Saudi Stock Market | May 2022

2022

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TASI Movement in May

TASI ended May 2022 at 12,921.7 points, representing a 5.9% decrease from last month’s close. With an average daily value traded of SAR 9.3bn- the total value traded aggregated at 166.9bn, representing an almost 9.3% M/M decline from April’s 184.2bn in total value traded. The Banking and Materials sectors accounted for 51.6% of the total value traded. The Diversified Financials and the Capital Goods sectors were the top performers of the month, after witnessing increases of 6.9% M/M and 3.6% M/M, respectively. Consumer Services and the Retail sector were the largest laggards among all sectors at a lackluster 15.8% and 12.6% negative price change from the previous month, respectively. In May, SIECO was the best performing stock, recording a 73.2% M/M increase. On the other hand, AICC was the worst-performing stock, posting a decline of -29.2% M/M.

Chemanol recorded the lowest P/E with 8.6x, compared to TASI’s P/E of 21.4x. The free-float ownership from qualified foreign investors (QFIs) in the TASI index made up 12.49% of the total free-float ownership in the market for the month of May. Down from this year’s high of 15.29% in February.

TASI started the month at 13,820.4 points and closed at 12,921.7 with an average daily value traded of SAR 9.3bn compared to SAR 9.2bn in April.

TASI rose by 1,640.0 points YTD (up 14.5%) yet is down by 812.1 points on a M/M basis (down 5.9% from the previous month). The Diversified Financials and Capital Goods sectors experienced the highest M/M growth of 6.9 and 3.6% M/M, respectively. On the other hand, Consumer Services and Retailing were the worst-performing sectors for the month, posting declines of 15.8% and 12.6%, respectively. As of the start of the year however, Diversified Financials has risen by approximately 28.8% YTD by the end of May.

Energy lagged closely behind at a 27.4% YTD performance. Consumer Durables and Pharmaceuticals & Biotechnology however were the worst performers on the YTD scale, both declined, at 19.0% and 16.1% respectively.

Banks and Materials registered the highest traded values among the sectors, accounting 27.2% and 23.8%, respectively, of the total value traded in May.

8-May 9-May 10-May 11-May 12-May 15-May 16-May 17-May 18-May 19-May 22-May 23-May 24-May 25-May 26-May 29-May 30-May 31-May

Value Traded (bn) - RHS Closing Price - LHS 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00

11,000 11,500 12,000 12,500 13,000 13,500 14,000

Value Traded per Sector (%)

27.2%

23.8%

5.0% 5.0%

4.9%

4.8%

4.0%

3.8%

3.4%

2.9%2.7%

12.7%

Banks Materials Energy

Diversiﬁed Financials Telecommunication Services

Utilities

Real Estate Mgmt & Dev't Health Care Equipment & Svc

Insurance Software & Services Food & Staples Retailing

others

Source: TADAWUL, Aljazira Capital Source: TADAWUL, Aljazira Capital

Source: TADAWUL, Aljazira Capital

Sectors Performance

M/M Performance YTD 6.9% 3.6% 3.3% 2.1%

28.8%

0.2%

8.8%

27.4% 26.0% 23.3%

3.1% 5.6%

23.2% 21.0%

13.4%

5.8%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Diversiﬁed Financials Capital Goods Food & Beverages Energy Healthcare Utilities REITs Food & Staples Real Estate Consumer Durables Consumer Services Media Transportation Insurance Banks Pharma & Bio Tech Software & Services Materials Telecom Commercial Service

Retailing

-1.0% -2.0% -3.1% -3.4% -3.6%

-5.8% -6.2% -6.3% -7.8% -8.1% -8.2% -8.3% -8.5% -9.3% -10.4% -12.6%

-15.8%

-3.9% -3.0% -3.1%

-9.7%

-16.1%

-0.3%

-15.7% ^-10.8%

-19.0%

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Top 10 Companies by Index Weight (Q1-2022)

Top 10 Highest Dividend Yields (2021)

Companies with the Lowest P/E (TTM)

Al Rajhi Bank is position as TASI’s largest constituent by the end of Q1-22 at 15.2% of the index. Al Rajhi Bank is then followed by Aramco and SNB, constituting 14.7% and 8.8% of TASI respectively.

Taiba, Arabian Cement (ACC), and Saudi Cement maintained their rankings for the highest dividend yields for the previous year. Taiba offered a divided yield of 12.6%, while ACC and Saudi Cement offered 6.7% and 6.2% for the same period. The average dividend yield offered by the market stood at 2.1%.

Chemanol and Sipchem traded at the lowest P/E ratios of 8.6x and 9.0x, respectively. This was followed by Tansee and Sabic Agri-Nutrients at 9.1x and 9.6x, respectively

Prices as of 8^ndof April 2022

AlRajhi and Aramco had the highest total value traded by the end of May at SAR 19.3bn and SAR 9.5bn, respectively.

Then followed by SNB and STC, which recorded 8.1bn and 7.5bn in total value traded for the month, in that order.

SIECO was the best performing stock in May, recording an increase of 73.2% on a M/M basis. This was followed by Tadawul Group, which rose up 15.3% from the previous month. In contrast, AICC was the worst-performing stock, posting a 29.2% M/M decline, followed by OASIS, down 22.2% M/M.

Dar Alarkan and Northern Cement traded at the lowest P/B of 0.75x and 1.05x, respectively. This was followed by Seera and Arabian Shield at 1.06x and 1.13x, respectively.

15.2% 14.7%

8.8%

5.1%

3.4% 3.4% 3.1% 2.8% 2.4% 2.3%

Al Rajhi Bank Aramco SNB SABIC STC Riyad Bank Alinma Bank BSFR MAADEN SABB

Dividend Yield Average market dividend yield 12.6%

6.7% 6.2% 6.1% 6.0% 5.8% 5.6% 5.4% 5.0% 5.3%

2.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Taiba * ACC Saudi Cement ARDCO Najran Cement Yanbu Cement Maharah Yansab YANSAB EPCCO

8.6 9.0 9.1 9.6 10.6 10.7 11.3 12.2 12.2 12.4

Chemanol Sipchem TASNEE SABIC AGRI-NUTRIENTS ALYAMAMAH STEEL MEPCO Petro Rabigh Bawan AXA COOPERATIVE Saudi Kayan

Top 10 Companies by Total Value Traded

Top/Worst Performing Companies (May 2022)

Companies with the Lowest P/B

19.3

9.5 8.1 7.5 7.2 6.9 6.6 6.1 5.2 4.0

ALRAJHI ARAMCO SNB STC SABIC ALINMA SABIC AGRI-NUTRIENTS KINGDOM MAADEN ACWA POWER

73.2%

15.3%

13.7%

12.5%

10.5%

-18.5%

-18.6%

-20.1%

-22.2%

-29.2%

SIECO TADAWUL GROUP DAR ALARKAN GACO ACWA POWER

MAHARAH SHAKER ARDCO OASIS AICC

0.75

1.05 1.06 1.13 1.15 1.17 1.19 1.24 1.24 1.25

DAR ALARKAN NORTHERN CEMENT Arabian Shield SEERA Kingdom SAUDI ELECTRICITY Tabuk Cement Jazira Takaful BAHRI Hail Cement

Source: Bloomberg, Aljazira Capital

Source: Argaam, Bloomberg, Aljazira Capital Research

*Exceptional dividend

Source: TADAWUL, Aljazira Capital

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• Among the other regional markets, Dubai and Egypt recorded notable decreases for the month of 10% and 8.1%, respectively. Abu Dhabi’s ADX edged at a modest decrease of 0.3%.

Kuwait, Qatar, and Oman all punctuated the month at declines, recording declines of 5.0%, 4.9%, and 1.0%, respectively.

Regional Markets

Market Close M/M YTD P/E

Dubai (DFM) 3,347 -10.0% 6.0 11.6

Abu Dhabi (ADX) 10,055 -0.3% 15.9 21.9

Kuwait (KSE) 6,390 -5.0% 2.4 12.8

Qatar (QE) 13,591 -4.9% 10.3 15.9

Oman (MSM) 4,158 -1.0% -0.3 11.8

Egypt (EGX30) 11,048 -8.1% -16.1 6.8

• The NASDAQ posted a 1.7% decline for the month as well, while the S&P 500 and the Dow Jones both ended the month flat at a 0.0% M/M change.

International Markets

Global Indices Close M/M YTD P/E

Dow Jones 32,990 0.0% -9.2% 17.7

Nasdaq 12,642 -1.7% -22.5% 26.3

S&P 500 4,132 0.0% -13.3% 20.5

FTSE 100 7,608 0.8% 3.0% 17.3

Germany DAX 30 14,388 2.1% -9.4% 13.0

• Other major global indices mostly experienced modest monthly price changes ranging from -1.0% to 1.0%

for May. However, the China Shanghai Composite ended the month at a 4.6%

increase from the previous month. The German Dax, Japanese Nikkei 225, and Hong Kong Hang Sang indices ended at 2.1%, 1.6%, and 1.5%, respectively.

Notable declines for the month are Russia’s MOEX at 3.7% M/M and the Australia ASX 200 at a 3.0% M/M decline.

France CAC 40 6,469 -1.0% -9.6% 14.6

Japan Nikkei 225 27,280 1.6% -5.3% 19.7

Russia MOEX 2,356 -3.7% -37.8% 3.9

Hong Kong Hang Seng 21,415 1.5% -8.5% 7.6

South Korea KOSPI 2,686 -0.3% -9.8% 11.5

China Shanghai Composite 3,186 4.6% -12.5% 12.9

Australia ASX 200 7,211 -3.0% -3.1% 16.8

India Sensex 55,566 -2.6% -4.6% 22.6

MSCI EM 1,078 0.1% -12.5% 11.4

MSCI World 2,791 -0.2% -13.6% 18.2

Source: Argaam, Bloomberg, Aljazira Capital

Commodities Performance

Commodity Name Price M/M Y/Y YTD 3 Yrs 5 Yrs LOW_52WEEK HIGH_52WEEK

Light Crude ($/bbl) 117.3 14.8% 81.2% 57.2% 91.0% 1.7 67.8 136.6

Brent Crude ($/bbl) 116.3 12.3% 77.2% 57.9% 90.5% 1.5 64.6 139.1

Texas crude ($/bbl) 115.3 9.5% 72.9% 52.5% 114.3% 1.3 61.7 130.5

Natural Gas ($/mn Btu) 8.7 12.4% 172.8% 118.4% 231.9% 2.6 3.0 9.4

GOLD ($/oz) 1,847 -3.1% -3.6% 0.4% 40.7% 1 1,690.6 2,070.4

Silver ($/oz) 21.8 -5.4% -23.1% -7.5% 47.7% 0.3 20.5 28.3

Steel ($/ton) 1,161 -15.0% -28.5% -17.1% 103.8% 1.0 970 1,945

Iron Ore (CNY/MT) 940 1.1% -19.2% 39.5% 14.2% 1.2 511 1,423

Wheat ($/bu) 1,041.3 3.0% 63.3% 42.2% 91.7% 0.9 631.5 1,284.0

Corn ($/bu) 731.3 -7.4% 35.8% 27.0% 76.7% 0.8 512.8 824.5

Sugar ($/lb) 19.4 1.3% 22.2% 5.5% 33.1% 0.3 15.5 20.5

SMP (EUR/MT) 4,097 1.3% 54.6% 20.4% 91.0% 1 2,640 4,100

Several of the commodities covered in this report experienced double digit percentage changes for the month of May.

Energies experienced the steepest increases with Light Crude, Natural Gas, and Brent Crude at a 14.8%, 12.4%, and 12.3% M/M changes respectively. Among the metals, steel saw the most significant decline at a 15% drop in prices from its previous month’s prices, while iron ore held up at a 1.1% M/M increase. Corn posted a 7.4% M/M decline as well.

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Economic Data

Macro Economic Data Q/Q Y/Y

GDP (Q1-22) N/A 2.20% 9.60%

Reserve Assets (Q1-22) 1692.6bn SAR -0.88% 0.54%

Public Debt (Q1-22) 958.6bn SAR N/A 6.35%

Public Debt/GDP (2021) 30.0% - -

Consumer Spending Apr-22 M/M Y/Y

ATM Withdrawals 47.6bn SAR -11.03% -7.25%

Point of Sales 49.4bn SAR -3.16% 24.50%

Total Spending (ATM & POS) 107.3bn SAR -4.40% -5.99%

No. of ATMs 16.4k -0.11% -3.22%

No. of ATM Transactions 128.6k -4.40% -5.98%

No. of POS Terminal 1161.9k 2.20% 41.07%

Inflation Rate (April-22) 2.3%

Repo Rate (May-22) 1.75%

1-Month 3-Months 6-Months 12-Months

Saudi Arabia (SAIBOR) 2.07 3.11 3.19 3.33

US (LIBOR) 1.12 1.61 2.11 2.74

Region Rate M/M (bps) YTD (bps) Y/Y (bps)

Saudi Arabia (SAIBOR-3M) 3.115 78.76 220.91 232.34

UAE (EIBOR-3M) 1.670 33.63 130.53 129.47

Bahrain (BHIBOR-3M) 2.729 65.39 121.22 111.06

Source: Argaam, Bloomberg, Aljazira Capital

Deposit & Loans – May 22

Deposits and Loans loses some of its momentum, while still posting gains of 0.7% M/M and 0.9% M/M during May. ADR, however, stood at 99.8%.

The Dollar Index clawed back some of its April gains by 1.2% by the end of May. The Euro and the Indian Rupee were the most appreciated against the dollar within the currencies monitored in this report at 1.8% M/M and 1.6%

M/M, respectively. The Japanese Yen and the British Pound both appreciated against the dollar during the month at 0.8% and 0.2%, respectively. The Chinese Yuan, however, depreciated against the dollar by 1.0%.

Both the current account reported and the reserves experienced declines from the previous month’s reporting.

The current account contracted by 16.4%, while reserves were 5.5% shorter than the previous month.

Deposits (bn) Loans (bn) ADR

Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-2282%84%86%88%90%92%94%96%98%100%102%

0.00 0.50 1.00 1.50 2.00

2.50 Government Current Account & Reserve (April-22)

Monthly change aginst the US Dollar (%)

250.0 300.0 350.0 400.0 450.0 500.0

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0

Government Current Account (SAR bn)

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 Government Reserve (SAR bn)

Source: SAMA, Aljazira Capital Source: SAMA, Aljazira Capital

Exchange Rate

1.6%

0.8%

-1.0%

0.2%

1.8%

-1.2%

-1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0%

Indian Rupee Japanese Yen

Chinese Yuan Sterling Pound

Euro

Dollar Index

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Source: Argaam June 6, 2022

SAUDI ELECTRICITY Cash Dividend Distribution

QACCO Cash Dividend Distribution

AYYAN Ordinary general meeting

Savola Group Cash Dividend Distribution

ALALAMIYA Ordinary general meeting

Amana Insurance Start of rights issue and subscription to new shares FARM SUPERSTORES Extraordinary general meeting

Arab Sea Ordinary general meeting

Retal Urban Development End of IPO June 7, 2022

NADEC Ordinary general meeting

ANAAM HOLDING Start of retail offering

NORTHERN CEMENT Ordinary general meeting

AICTEC Extraordinary general meeting

June 8, 2022

SPIMACO Eligibility for Cash Dividend

SPIMACO Ordinary general meeting

ALBAHA Ordinary general meeting

ANAAM HOLDING End of subscription to new shares

Petro Rabigh Eligibility for subscription to rights issue Petro Rabigh Extraordinary general meeting (capital hike)

NGDC Eligibility for Cash Dividend

NGDC Extraordinary general meeting

ALHAMMADI Eligibility for Cash Dividend

Saudi Aramco Cash Dividend Distribution

June 9, 2022

Etihad Etisalat Cash Dividend Distribution

Wafrah Ordinary general meeting

NGC Cash Dividend Distribution

SRECO End of subscription to new shares

SPM Extraordinary general meeting

June 12, 2022

GACO Ordinary general meeting

BSFR Extraordinary general meeting

YCC Eligibility for Cash Dividend

SINAD HOLDING Ordinary general meeting

Almunajem Foods Cash Dividend Distribution

Retal Urban Development Final allocation date June 13, 2022

ALABDULLATIF Extraordinary general meeting

AXA COOPERATIVE Extraordinary general meeting

MEPCO Ordinary general meeting

WATANI STEEL Ordinary general meeting

June 14, 2022

ALABDULLATIF Extraordinary general meeting

AXA COOPERATIVE Extraordinary general meeting

MEPCO Ordinary general meeting

WATANI STEEL Ordinary general meeting

Wafrah Extraordinary general meeting (capital hike)

ALKHALEEJ TRNG Extraordinary general meeting

SHL Cash Dividend Distribution

Raoom Trading Extraordinary general meeting

Source: Argaam

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Al-Jazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37

RESEARCH DIVISIONRATING TERMINOLOGY

Disclaimer

AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business.

1. Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target.

Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months.

2. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target.

Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months.

3. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months.

4. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.

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