Saudi investors look at screen at one of the investment centers as stock prices hit fresh records in the week to Thursday. (AN photo)

JEDDAH, 21 May 2005 — Saudi shares will look to Monday’s listing of Saudi Dairy and Foodstuff Company (SADAFCO) and to world oil prices for direction next week after hitting fresh records in the week to Thursday.

The Tadawul All-Share Index (TASI) closed the week at 12,369.04 points on Thursday, just one percent off Wednesday’s record close of 12,491.40 points, due to the rise of Saudi Basic Industries Corporation (SABIC) and Saudi Telecom Co. (STC) shares by 4.5 percent and 11.4 percent respectively. The two companies account for 44.5 percent of the total market. The index was up 4.7 percent for the week. With this figure, the index made a growth of 50.7 percent since the beginning of this year.

Prices of cement companies continued their upsurge following a Cabinet decision to cut tariff on cement imports from 20 to five percent.

Bankers said the recent rally was triggered partly by Saudi Arabian Monetary Agency Governor Hamad Al-Sayari’s prediction that economic growth this year would eclipse the 5.3 percent recorded in 2004.

But an easing of world prices for oil, Saudi Arabia’s chief source of revenue, dampened the exuberance. Shares in SABIC also fell 3.3 percent on Thursday after a report that three international firms were competing with the petrochemical company to buy an Egyptian fertilizer firm. The TASI index lost 122.36 points on Thursday, or 0.98 percent.

Analysts say the announcement that shares in newly floated SADAFCO will start trading on Monday gave the market a lift this week and investors would closely watch their debut.

The stocks, priced at SR260 ($69.33) each, were six times oversubscribed in last month’s initial public offering.

Market sources are also expecting an announcement soon from the Capital Market Authority (CMA) of an IPO date — possibly in early June — for a second dairy firm, Al-Marai. But traders are likely to be scrutinizing world oil prices even closer than usual next week. “The performance of the Saudi stock market is still highly sensitive to oil prices that witnessed sharp fluctuations recently, which makes anticipation of future market outlook difficult,” Bakheet Financial Advisors said in a report.

Financial consultant Bishr Bakheet said investors believed oil prices had stabilized after losing $10 from April’s nominal record of $58.28 a barrel. Share prices in the world’s biggest oil exporter often mirror movements on world crude markets. “Everybody had thought after recent discussion that oil could go down further, but there has been no crash in oil prices,” Bakheet said.

Turnover on the Saudi exchange, which in terms of capitalization is bigger than all its Arab neighbors combined, eased slightly to just over SR75 billion.

STC rose more than 10 percent in the week to Thursday, closing at SR905, partly on expectations of good first half profits.

Cement firms brushed off news the government had waived duties on cement imports for the rest of the year in an effort to meet surging local demand from the construction industry and curb domestic prices.

Analysts said international prices are no cheaper than Saudi domestic production, meaning there was little chance that local producers will be swamped by cheap imports. Southern Cement Company rose by the daily maximum of 10 percent on Thursday to SR762.25.

Meanwhile, in other Arab markets, Bahraini stocks edged down in the week to Thursday. The index ended at 2,166.76 points, down 0.72 percent from the previous week. The index, which hit a record high of 2,229 points earlier this month, is up 22 percent this year.

Around 6.4 million shares worth 4.6 million dinars ($12.15 million) changed hands in the week, down from 6.6 million shares valued at 6.4 million dinars in the previous week.

Bahrain Telecommunications Co. was the most active with shares worth 1.6 million dinars changing hands. It ended at 1.575 dinars, down from 1.607 dinars last week.

Bank of Bahrain and Kuwait and Bahrain Maritime and Mercantile shed three fils each to close at 675 fils and 1.262 dinars respectively.

Kuwaiti stocks ended the trading week on a high note on. The Kuwait Stock Exchange index of more than 140 stocks edged up 4.90 points, or 0.06 percent, to close at 8,484.30 on Wednesday. The gauge ended the week up more than 2 percent from last Wednesday’s close of 8,303.60.

The Kuwait Stock Exchange index is up 32 percent to date, after rising 101 percent in 2003 and 34 percent in 2004, buoyed by high oil prices, record corporate profits and low interest rates.

The Muscat Securities Market 30-share index closed at 4,637.56 points in the week to Thursday, up 1.7 percent from a week ago. It is down from a high of 4,684.52 hit in late April, but still up 37 percent in 2005.

— With input from agencies