Basil Al-Ghalayini, lefft, John Sfakianakis and Sami A. Al-Nwaisir, right.

A top Jeddah-based economist has cautioned Saudi stock market investors against being influenced by rumors spread by social media.

“Social media keeps us connected. But there is a negative side,” said Basil Al-Ghalayini, CEO of BMG Financial Group.

Al-Ghalayini and Sami A. Al-Nwaisir, chairman of the Board of Al-Sami Holding Group, were guest speakers at the Arab News Business Dialogue that took place in Jeddah on Sunday.

John Sfakianakis, Middle East director at Ashmore Group, joined the discussion with a team of Arab News journalists in Jeddah via conference call from Riyadh.

Al-Ghalayini also pointed out that lower oil prices are affecting leading shares of Saudi petrochemical companies. But he said it was not clear whether the fall is directly related to their cost or driven by the sentiments of the market traders because of panic spread by the social media.

Al-Ghalayini was commenting on possible reasons for nearly 10 percent losses suffered by the Saudi stock market this year. The Tadawul All-Share Index (TASI), however, rose by 76.73 points (1.04 percent) on Monday.

“People act very prematurely without looking at the financials and fundamentals of a company because of the viral effect of certain rumors,” he said. According to latest Tadawul statistics, Petrochemical Industries index lost nearly 17 percent so far this year. Petrochemical stocks gained 0.41 percent on Monday, led by Saudi Basic Industries Corporation (SABIC).

World oil prices, which have dropped by more than 50 percent since June 2014, gained by more than 2 percent on Monday.

Global benchmark Brent crude oil rose $1.19 to a high of $48.66 a barrel before easing back to trade around $48.60 by 1200 GMT.

US light crude oil futures were up $1.15 a barrel at $45.83.

The three economists expressed optimism about the direction of Saudi economy amid geopolitical risks caused by conflicts in other parts of the region. They welcomed the Saudi Arabian Monetary Agency’s recent efforts to raise funds from the local debt market.

Sfakianakis said he saw an improvement in oil prices in the coming months in the range of $55 to $60 per barrel.

The Kingdom needs to spend its huge foreign reserves wisely, he said.

Al-Nwaisir stressed the need to revamp what he termed as the Kingdom’s financial infrastructure to overcome modern challenges.

The economists also voiced confidence about the progressive role of the Council of Economic and Development Affairs, chaired by Deputy Crown Prince Mohammed bin Salman. They expressed support for the newspaper’s initiative in promoting dialogue and interaction between the media and business personalities and economic experts.