The Saudi stock market fell below the level of 11 thousand points amid a scarcity of liquidity and the dominance of individual traders, at a time when investors are reluctant to build new positions and await clarity on the foreign ownership file and the path of US interest rates. While the funds of a growing segment of Saudis are directed to local IPOs and to US stock exchanges. The general index, “TASI,” lost 1.44% of its value and recorded 10,851 points, with all leading stocks and most major sectors falling, led by banks, energy and basic materials. The value of transactions improved to 3.5 billion riyals after recording their lowest levels in about three years during the last session. This sharp decrease in liquidity, according to Ikrami Abdullah, chief financial analyst at Al-Eqtisadiah newspaper, is due to the lack of clarity on a number of important files, especially the foreign ownership policy in the market, in addition to the uncertainty surrounding the future path of monetary policy. He added during an interview with Al-Sharq: “Weak liquidity leads to more reluctance. When a new stimulus appears in the market, liquidity rises and so does the index, as happened when there was talk of raising foreign ownership rates last September, so that liquidity then exceeded ten billion riyals.” The US market and IPOs are withdrawing liquidity. Muhammad Al-Farraj, Senior Head of Asset Management at Arbah Capital, attributes the weakness in trade to investors waiting for the Federal Reserve’s decision in December, in addition to the implementation of more IPOs in the market, as well as the increased orientation of Saudi investors to US stock exchanges. He said during an intervention with Al-Sharq: “Data indicates that Saudis’ trade in the US market increased by about 141% during the third quarter to 216 billion riyals. This is also one of the main reasons for the scarcity of liquidity in the Saudi market.” But he pointed out that the US market is currently trading at premiums, pointing to the possibility of inflated share prices, which could return money and investors to the Kingdom’s market, which trades at a discount to fair value. Selectivity and dominance of individuals For her part, Mary Salem, a financial analyst at Al-Sharq, believes that transactions have become selective based on corporate news, given the dominance of individual traders in the market, but she expected funds and institutions to return to positioning during the month of December, which could restore momentum to the market and push it out of the sideways range. Salem added, “The positive news received on the real estate sector did not have an impact for long as the sector rallied at the start of yesterday’s session to support the index, but it gave up those gains at the end of the session.” The Kingdom intends to allow foreigners to own a wide range of real estate, including in the holy cities, starting next January, according to statements by a senior official reported by Bloomberg on Friday. The property sector index was down around 0.5% at the start of today’s trading.