Tadawul market cap reached SR 1.44 trillion in January

Updated 05 February 2013

Tadawul market cap reached SR 1.44 trillion in January

The Saudi stock market has exhibited strong momentum at the beginning of the year in a similar fashion to global equities. The fact that the epicenter of the crisis is doing fine is a testimony of the strength of equities and the growing appetite for risk, with Dow Jones Industrial Average crossing the 14,000 mark, which is the highest since 2007 and the broader S&P 500 off to best start since 1997. The domestic market (Tadawul) is buoyant despite the fact that the 7,000 level remains a psychological barrier.
In January, Tadawul All-Share Index (TASI) closed at 7,043.55 points, gained 242.33 points (3.56 percent) over the close at the end of December 2012. The index gained 6.30 percent compared to the same period of the previous year (end of January 2012).
Highest close level for the index during the month was 7,165.76 as on Jan. 12, according to a Tadawul report.
The Tadawul index closed down 0.11 percent at 7,025.44 points yesterday.
Commenting on the Tadawul’s performance, Tamer El Zayat, senior economist at the National Commercial Bank (NCB), told Arab News: “I do believe that we might continue to see a range-bound movement that might be broken to the upside to around 7,500 in Q2 on the back of robust earnings. Yet, I do subscribe to the theme that global markets have gone too high too soon and that it is likely that equities might exhibit a pull back in the H2, 2013, thus limiting the upside potential for Tadawul this year to a single-digit growth similar to last year.”
In January, total equity market capitalization reached SR 1.44 trillion ($ 383.94 billion), increased by 2.81 percent over the previous month.
The total value of shares traded in January increased by 3.35 percent to SR 128.13 billion ($ 34.17 billion).
The Tadawul report said value of shares traded by individuals was SR 113.15 billion (88.30 percent) for buying, and SR 119.76 billion (93.46 percent) for selling.
The value of shares traded by institutions was SR 12.77 billion (9.97 percent) for buying and SR 7.21 billion (5.63 percent) for selling.
The value of shares traded by foreigners (SWAP) was SR 2.21 billion (1.73 percent) for buying, and SR 1.17 billion (0.91 percent) for selling.
The value of shares traded by Saudis was SR 121.99 billion (95.21 percent) for buying, and SR 123.72 billion (96.56 percent) for selling.
The value of shares traded by the GCC was SR 2.00 billion (1.56 percent) for buying, and SR 1.27 billion (0.99 percent) for selling.
The value of shares traded by foreigners (residents & SWAP) was SR 4.13 billion (3.23 percent) for buying, and SR 3.15 billion (2.45 percent) for selling.
The total number of shares traded reached 4.66 billion shares for the month of January compared to 4.39 billion shares traded during the month of December 2012, thus increasing by 6.03 percent.
The total number of transactions executed during January, however, dropped by 3.74 percent to 2.79 million compared to 2.90 million trades for the month of December.
Asim Bukhtiar, vice president /head of research, Riyad Capital, said: The Tadawul’s January performance benefited from earnings and dividend effect. For the remainder of first quarter, we preclude large movements in the market given the absence of catalysts on the horizon. Surprises may materialize from international headlines and brokers/analysts adjusting outlook for the year ahead as full results become available.”
Jarmo T. Kotilaine, a regional analyst, said: “The recovery we have seen is reflective of the cautious optimism we are beginning to see about the global economy. This has translated into greater optimism in the stock markets and is naturally positive for commodity prices, including oil.”
He added: “Overall, the situation remains mixed with a number of risks on the horizon but the Saudi economy can likely look forward to a good year even if the performance of the oil sector is unlikely to match last year.”
Farouk Miah, head of equity research at NCB Capital, said: “The January performance is encouraging and is a positive sign for the year. For 2013, we expect profit growth of around 12-13 percent for the Saudi market. So even if the P/E multiple remains the same, this should mean the market goes above 7,500.”
He added: “We believe the globally exposed sectors such as petrochemical could perform well given improving global macro outlook, as well as the attractive valuations of the stocks. Earnings growth outlook on the domestically focused areas e.g. retail, telecom and foods remains strong.”

Saudi Arabia, Russia and China give EU trade reforms thumbs down at WTO

Updated 17 min 8 sec ago

Saudi Arabia, Russia and China give EU trade reforms thumbs down at WTO

  • China is suing US and EU at WTO
  • Kingdom warns new rules are concerning

The EU’s new rules against countries dumping cheap goods on its market got a rough ride at a World Trade Organization meeting, where China, Russia and Saudi Arabia led a chorus of disapproval, a trade official said on Thursday.

The EU, which is in a major dispute with China about the fairness of Chinese pricing, introduced rules last December that allow it to take into account “significant distortions” in prices caused by government intervention.

A Chinese trade official told the WTO’s anti-dumping committee that Beijing had deep concerns about the new methodology, saying it would damage the WTO’s anti-dumping system and increase uncertainty for exporters, an official who attended the meeting said.

China argued that the concept of “significant distortion” did not exist under WTO rules, and the EU should base its dumping investigations on domestic prices in countries of origin, such as China.

The EU reformed its rules in the hope they would allow it to keep shielding its markets from cheap Chinese imports while fending off a Chinese legal challenge at the WTO.
China said that when it joined the WTO in 2001, the other member countries agreed that after 15 years they would treat it as a market economy, taking its prices at face value.

But the US and the EU have refused, saying China still subsidises some industries, such as steel and aluminum, which have massive overcapacity and spew vast supplies onto the world market, making it impossible for others to compete.

China is suing both the US and the EU at the WTO to try to force them to change their rules.

Legal experts say the dispute is one of the most important in the 23-year history of the WTO, because it pits the major trading blocs against each other with fundamentally opposing views of how the global trade rules should work.

In the WTO committee meeting, Saudi Arabia said the new rules were very concerning, and it challenged the EU to explain how EU authorities could ensure a fair and objective assessment of “significant distortion.”

Russia said the EU rules violated the WTO rulebook and certain aspects were unclear and created great uncertainty for exporters. Bahrain, Argentina, Kazakhstan and Oman also expressed concerns.

But a US trade official said the discussion showed that appropriate tools were available within the WTO to address distortions affecting international trade.