Global tech stocks had a good month in September

Tech stocks rode a high in September on Fed rate cuts + AI optimism: Tech equities in the US saw surging market caps last month, supported by the US Federal Reserve’s decision in late September to kick off its monetary easing cycle with a 50 bps interest rate cut and continued optimism around developments in AI, Reuters reports.

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Breaking with history: September is typically the worst month for US equity markets, a trend that has been largely maintained since 1950. Historically speaking, the S&P 500 “has generated an average monthly decline of 1.2% and finished higher only 44.3% of the time dating back to 1928,” Market Watch says, citing Dow Jones Market Data.

How top players fared: Oracle’s market cap rose 21.3% m-o-m at USD 472.2 bn as the company capitalized on growing demand for its AI-powered cloud services, with Meta also up 10% at USD 1.45 tn on the back of product unveilings. Automaker Tesla — which is sometimes considered as a tech player — also posted a 22.2% jump in its market cap to USD 834.4 bn, buoyed by record EV sales in China, and plans to roll out its full self-driving software to markets in Europe and China.

IN CONTEXT- The top five largest companies globally by market capitalization are tech or tech-related firms. Apple is at the top of the league with a market cap of USD 3.54 tn, followed by Microsoft (USD 3.2 tn), Nvidia (USD 3.0 tn), Alphabet (USD 2.05 tn), and Amazon (USD 2.0 tn). Saudi Aramco — whose USD 1.75 tn market cap places it in the sixth spot — and Walmart are the only two non-tech companies among the top 10 globally.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning, with Japan’s Nikkei firmly in the green while the Hang Seng Index is down c.3%. Meanwhile, Wall Street futures are a sea of red, with Dow Jones, S&P, and Nasdaq futures all down.

THE CLOSING BELL: TADAWUL-

The TASI fell 1.7% yesterday on turnover of SAR 8.1 bn. The index is up 0.6% YTD.

In the green: Albaha (+8.3%), East Pipes (+2.0%) and Zoujaj (+1.7%).

In the red: Amana Ins. (-6.0%), Malath Ins. (-5.4%) and MBC Group (-5.3%).

THE CLOSING BELL: NOMU-

The NomuC fell 1.4% yesterday on turnover of SAR 34.5 mn. The index is up 1.7% YTD.

In the green: Naseej Tech (+8.9%), Enma Alrawabi (+7.9%) and Almodawat (+6.7%).

In the red: Naba AlSaha (-9.8%), Mayar (-9.3%) and Al Qemam (-7.7%)

CORPORATE ACTIONS-

#1- Savola Group submitted its capital reduction documents to the CMA, it said in a disclosure to Tadawul. The dairy giant is looking to reduce its capital by 73.5% to SAR 3 bn by canceling 834 mn shares and distributing its stake in Almarai to eligible shareholders based on the market value of Almarai shares on the distribution date.The reduction is intended to optimize Savola’s capital structure, as the capital is deemed excessive for current needs. Riyad Capital has been appointed as the financial advisor on the transaction.

The caveat: Company creditors may object to the capital reduction by sending a registered letter with supporting documents to the firm. The creditors’ objection period opened Thursday, 26 September and will run until Sunday, 10 November, according to a separate disclosure. The transaction is also subject to CMA approval.

#2- Saudi Networkers Services’ board has greenlit SAR 12 mn in dividends at SAR 2 per share for 1H 2024, it said in a disclosure to Tadawul. Distributions are set for Thursday, 17 October.

#3- Tadawul-listed Al Baha Investment has received approval from the Capital Market Authority for a capital decrease, the authority said in an announcement. The decrease will see the company cut its capital from SAR 297 mn to SAR 218.3 mn by canceling 787.1 mn shares in a bid to offset some SAR 78.7 mn in accumulated losses, according to an earlier filing to the exchange.