The Saudi market is heading to record its fifth weekly loss in a row, in the longest series of declines since November 2025, with continued weak liquidity and high financing costs, amid investors’ caution about the repercussions of geopolitical tensions.
The main market index, TASI, moved in a narrow range during the beginning of Thursday’s trading, remaining down by about 1.5 percent compared to last week’s close.
The index ended September with a decline of 6.1 percent, erasing its gains since the beginning of the year, and also suffered its second consecutive quarterly loss.
Investors' attention is turning to the companies' results for the third quarter, amid anticipation of their ability to support market performance in the face of rising financing costs.
Most major sectors declined during the week, as the energy sector fell by about 1.9 percent, affected by the decline in Saudi Aramco shares.
The basic materials and utilities sector indices also decreased by about 2.9 percent each, while the banking sector was more consistent, declining slightly by about 0.1 percent.
The decline in the energy sector came at a time when oil prices stabilized on Wednesday, as Brent crude for December delivery was trading near $99 a barrel, after exceeding the $105 level earlier in the week.
West Texas Intermediate crude was also trading near $90 per barrel.
Standard & Poor's Global said on Thursday that the purchasing managers' index for Turkey's manufacturing sector fell to 47.9 in September from 48.1 in August, with companies indicating that the war in the Middle East negatively affected new orders and production.
Operating conditions declined month-on-month for the thirtieth consecutive month, while input cost inflation reached a four-month high in September, as a result of higher fuel, oil and transportation costs associated with the conflict in the Middle East. Weak demand led to a further decline in new orders during September, and new export orders also declined in light of continued weakness in international demand.
Manufacturers have reduced staffing, purchasing and inventory levels to adapt their operations to weak demand, while supplier delivery times have increased, as sea freight delays and material shortages exacerbate the disruptions faced by suppliers as a result of rising prices.
Andrew Harker, director of economic research at Standard & Poor's Global Market Intelligence, said that geopolitical uncertainty limited the sector's growth, but the average PMI for the third quarter was slightly higher than in the second quarter, indicating "some initial signs of recovery."
Official data released on Thursday showed that Indonesia recorded a much larger-than-expected trade surplus of $3.55 billion in August, widely exceeding market expectations, while some economists questioned the sustainability of this situation.
The August surplus is the largest since September 2025, according to LSEG data, and is much higher than the average forecast of about $630 million, according to a Reuters poll.
This large surplus may alleviate concerns about the deterioration of Indonesia's current account situation, after the country recorded its largest deficit since 2018 during the April-June quarter.
But Erman Faiz, an economist at Danamon Bank, said that although the surplus provides a buffer for foreign currencies in the near term, this improvement is “fragile and not structural.”
Fayez attributed this to a decline in import growth below expected levels, noting that this situation is temporary.
“Therefore, we remain cautious about external expectations, especially as the terms of trade have become less favorable,” he said.
He added that Danamon Bank still expects the central bank to further tighten monetary policy to deal with external pressures.
Import growth was below expectations
Indonesia, the largest economy in Southeast Asia, is the world's largest exporter of thermal coal, palm oil and nickel, and is also a major supplier of tin, copper, aluminum and coffee. The country benefited this year from higher prices for some of its major commodity exports, with some of the gains driven by rising global crude prices as a result of the conflict in the Middle East, but import bills also rose sharply, given the country being a net importer of oil.
Exports rose by 6.72 percent year-on-year in August to reach $26.61 billion, according to data from the Indonesian Statistics Authority, exceeding the 4.3 percent increase expected in a Reuters poll.
This increase, which exceeded expectations, was driven by increased shipments of non-ferrous metal products, nickel, aluminium, copper, and basic chemical products.
In contrast, imports rose by 19.09 percent year-on-year to reach $23.06 billion, which is less than the 31.14 percent jump expected by the survey.
Faisal Rahman, an economist at Permata Bank, said that import growth is expected to remain strong in the coming period in conjunction with the improvement in the Purchasing Managers' Index in September, while exports may face obstacles resulting from weak demand.
Rahman expected Indonesia's current account deficit to expand to reach 2.49 percent of GDP in 2026, and to stabilize at approximately this level in 2027, which is a much higher percentage than the expected deficit of 0.09 percent in 2025, suggesting that the central bank will continue to maintain a more stringent monetary approach.
It is noteworthy that the Bank of Indonesia had raised interest rates by 100 basis points during the period between May and June, to support the local currency, the rupiah, which was witnessing a decline.
