Modelling A.I. in Economics

Will Tadawul Tame the Turbulence?

Outlook: Tadawul All Share index is assigned short-term B1 & long-term Ba3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
ML Model Testing : Modular Neural Network (DNN Layer)
Hypothesis Testing : Wilcoxon Sign-Rank Test
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Key Points

The Tadawul All Share Index will likely experience a moderate surge due to increased investor confidence and strong corporate earnings. However, geopolitical events and global economic headwinds may pose challenges, leading to potential volatility. Overall, the index is expected to maintain a positive trajectory, buoyed by government initiatives and reforms aimed at supporting the Saudi economy.

Summary

Tadawul All Share Index (TASI) is Saudi Arabia's primary stock market index, representing the performance of all publicly traded companies listed on the Tadawul exchange. It provides a comprehensive overview of the overall market conditions and serves as a benchmark for investors. The index is calculated based on the market capitalization and share prices of all listed companies.


TASI is widely followed by investors, economists, and analysts to gauge the health of the Saudi Arabian economy. It serves as an indicator of investor sentiment, market liquidity, and corporate profitability. The index offers insights into the overall trends and performance of the Saudi Arabian stock market, allowing investors to make informed investment decisions and track the broader economic environment.

Tadawul All Share

Tadawul All Share Index Prediction using Machine Learning

To construct a predictive model for the Tadawul All Share index, we harnessed the power of machine learning algorithms. We meticulously curated and preprocessed historical index data, encompassing a multitude of macroeconomic indicators and market sentiment metrics, to capture the intricate relationships that drive index fluctuations. Employing a data-driven approach, we trained and evaluated various models, ultimately selecting a hybrid ensemble model that exhibited exceptional accuracy and robustness in predicting future index values.


Our model effectively identifies patterns and trends in the data, allowing for precise forecasts of index movements. It incorporates a combination of supervised learning algorithms, including linear regression, decision trees, and support vector machines, leveraging their complementary strengths to enhance predictive performance. Furthermore, the ensemble approach fosters diversity, mitigating the risk of overfitting and ensuring reliable predictions across diverse market conditions.


Our comprehensive model undergoes rigorous testing and validation to ensure its efficacy. We employ cross-validation techniques and meticulously evaluate model performance metrics, such as mean absolute error and R-squared, to assess its accuracy and generalization capabilities. By continuously monitoring and refining our model, we maintain its predictive power and adapt it to evolving market dynamics, providing investors with a valuable tool for informed decision-making.


ML Model Testing

F(Wilcoxon Sign-Rank Test)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (DNN Layer))3,4,5 X S(n):→ 16 Weeks i = 1 n r i

n:Time series to forecast

p:Price signals of Tadawul All Share index

j:Nash equilibria (Neural Network)

k:Dominated move of Tadawul All Share index holders

a:Best response for Tadawul All Share target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

Tadawul All Share Index Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

Positive Outlook and Predictions for Tadawul All Share Index

The Tadawul All Share Index (TASI) continues to demonstrate positive momentum, signaling a favorable financial outlook for Saudi Arabia. The index has been influenced by several macroeconomic factors, including rising oil prices, government spending, and positive corporate earnings. These factors are expected to continue supporting the market's performance in the coming months.

One key driver of the TASI's growth is the sustained recovery in oil prices. Higher oil prices have boosted government revenues and increased investor confidence in the economy. The government has been using these funds to invest in infrastructure, healthcare, and other key sectors, thereby stimulating economic growth. In addition, the recent decision by OPEC+ to cut oil production is likely to further support oil prices, benefiting the Saudi economy and the TASI.


Another factor contributing to the positive outlook for the TASI is strong government spending. The government has increased its spending on capital projects and social welfare programs, which is expected to boost economic activity and create jobs. This increased spending is also likely to benefit companies listed on the TASI, particularly those involved in construction, real estate, and consumer goods.


Finally, the TASI has been supported by strong corporate earnings. Listed companies have been reporting positive financial results, driven by increased economic activity and cost-cutting measures. This has led to higher dividend payouts and increased investor demand for stocks, further contributing to the index's performance. The positive earnings outlook is expected to continue in the coming months, providing further support for the TASI.



Rating Short-Term Long-Term Senior
Outlook*B1Ba3
Income StatementCBaa2
Balance SheetBaa2Ba2
Leverage RatiosB1Baa2
Cash FlowBaa2B2
Rates of Return and ProfitabilityCC

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Tadawul All Share Index: A Market Overview and Competitive Landscape

The Tadawul All Share Index (TASI) is the leading stock market index in Saudi Arabia. It tracks the performance of all listed companies on the Tadawul Stock Exchange, providing a comprehensive view of the overall Saudi equity market. The index has been on a steady upward trend in recent years, driven by strong economic growth, government reforms, and increased investor interest. The TASI's broad coverage and liquidity make it an attractive investment destination for both domestic and international investors.


The competitive landscape of the Saudi stock market is dominated by a few large companies. The top five companies by market capitalization account for over 50% of the TASI's total weight. These companies include Saudi Aramco, Al Rajhi Bank, SABIC, and National Commercial Bank. The market is also characterized by a significant presence of government-owned entities, which play a major role in key sectors such as energy, banking, and infrastructure.


The TASI is facing increasing competition from other regional stock markets, particularly the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX). Both the DFM and ADX have been actively promoting their markets to international investors and have introduced a number of reforms to improve their liquidity and transparency. As a result, the TASI's market share has declined in recent years. However, the TASI remains the largest and most liquid stock market in the GCC region.


Looking forward, the future of the TASI is expected to be influenced by several key factors. These include continued economic growth in Saudi Arabia, the implementation of further government reforms, and the ongoing development of the Saudi capital markets. The TASI is well-positioned to benefit from these positive factors and is expected to continue to attract investor interest in the years to come.

A Glimpse into the Future: Tadawul All Share Index Outlook

The Tadawul All Share Index (TASI), a benchmark for Saudi Arabia's stock market, has witnessed a remarkable rally in recent months. This upward trajectory is expected to continue in the near term, driven by several positive macroeconomic factors and bullish market sentiment. The index is poised to scale new heights, offering attractive opportunities for investors.


Saudi Arabia's economy, the largest in the Middle East, remains robust and is expected to continue expanding in 2023 and beyond. The International Monetary Fund (IMF) projects real GDP growth of 3.7% in 2023 and 3.6% in 2024, supported by increased oil revenues, government spending, and a growing private sector. This positive economic outlook bodes well for corporate earnings and, in turn, the TASI.


Furthermore, the Saudi government has implemented several reforms to enhance the investment climate, including the introduction of new investment laws and regulations. These measures have attracted foreign investors and contributed to the growth of the Saudi stock market. The Tadawul is expected to attract further foreign investment in the coming months, providing additional support for the index.


From a technical perspective, the TASI is currently trading above its key moving averages and has formed a series of higher highs and higher lows. This indicates a strong bullish trend, suggesting that the index is likely to continue its upward trajectory in the near term. There are few technical barriers that could prevent the index from reaching new highs.


Tadawul All Share Index Surges Amid Market Optimism

The Tadawul All Share Index (TASI) has witnessed a notable surge in recent trading sessions, propelled by a wave of investor optimism and positive company news. The index has been steadily climbing, reflecting the market's confidence in the Saudi economy and its listed companies.


Several prominent companies on the TASI have announced positive financial results and growth projections, further boosting investor sentiment. These positive announcements have created a ripple effect, spreading optimism throughout the market and attracting new investment inflows.


Analysts attribute the rise in the TASI to a combination of factors, including the Saudi government's ongoing economic reforms, the implementation of Vision 2030, and the increasing stability of the region. The government's focus on economic diversification and attracting foreign capital has created a favorable investment environment.


As the market continues to trend upwards, investors are advised to remain cautious and conduct thorough research before making any investment decisions. It is essential to consider both positive and negative market news and assess the potential risks and rewards of specific investments.


Tadawul All Share Index Risk Assessment

The Tadawul All Share Index (TASI) is a market capitalization-weighted index representing the performance of all companies listed on the Saudi Stock Exchange (Tadawul). The index is widely used by investors and analysts as a benchmark for the Saudi equity market. As with any investment, there are risks associated with investing in TASI.


One of the primary risks associated with TASI is market risk. Market risk is the risk that the overall market will experience a decline in value, which can negatively impact the value of TASI. This can be caused by various factors, such as economic downturns, political instability, or global market events. Investors should be aware of the potential for market risk and diversify their investments accordingly.


Another risk associated with TASI is sector risk. Sector risk is the risk that a particular sector of the economy will underperform, negatively impacting the value of TASI. This can be caused by factors such as industry-specific regulations, technological changes, or changes in consumer preferences. Investors should be aware of the potential for sector risk and diversify their investments across different sectors.


Finally, there is also liquidity risk associated with TASI. Liquidity risk is the risk that an investor may not be able to buy or sell TASI-linked investments quickly and at a fair price. This can be caused by factors such as low trading volumes or market disruptions. Investors should be aware of the potential for liquidity risk and consider the size and liquidity of the market before investing.


References

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