“Central”: Stock markets are more vulnerable to interest rate shocks


The financial stability report issued by the Saudi Central Bank said: The stock markets are more vulnerable to interest rate shocks, which may lead to a possible correction of asset prices. Assets valuation in stock markets.

According to the report, sharp declines in asset prices may lead to market disruption or a lack of liquidity, as happened in the government debt market at the beginning of 2020, however, concerns about a long rise in price increases.

The report indicated that at the beginning of 2021, long-term interest rates rebounded significantly, primarily driven by investors’ expectations of higher inflation and higher interest rates.

The report indicated that the indicator of the main market (Tasi) increased by about 2592 points, to close the level of 11282 points in the end of 2021 AD, recording a growth caused by 29.8% compared to the same period of the period of the previous year, and the recovery of the market in the Kingdom in the end of the year 2021 may be attributed to the end of the year 2021 Throughout the year, as a result of easing the restrictions of the pandemic control and providing vaccines, the rate of profitability decreased to 20.6 times by the end of 2021, compared to about 29.2 times in the same period last year; The decline is due to the improvement in profits recorded in 2021 compared to the previous year, and according to the report, the performance of the main market index was relatively consistent with the international markets, and there was a positive correlation between the three main price correlations and the positive correlation of the past.

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