Saudi Shares Fall Slightly as Investors Wait for Results

RIYADH, 18 July 2003 — Saudi shares closed the week yesterday slightly down as investors waited for the mid-year financial results of the leading companies, analysts said.

The Tadawul All-Shares Index (TASI) finished the week at 3,628.89 points, down 0.6 percent on last week’s closing of 3,651.55 points.

The TASI is 44.1 percent higher than at the start of 2003.

The index recorded an all-time high of 3,673.10 points on Saturday, the first day of trading.

“The market underwent limited fluctuations in the following days caused by instability in the stocks of market leaders Saudi Telecom and Saudi Basic Industries Corp. (SABIC),” Bakheet Financial Advisors (BFA) said.

The instability was due to investor doubts that second-quarter profits of the two companies may be lower than first-quarter profits, BFA added.

Saudi Telecom has reduced its charges in preparation for competition with other firms when the market will be opened up next year.

So far, most of the few firms that announced mid-year results have reported a decline in profits for the second quarter.

Saudi stocks ended the first six months of 2003 up 43.5 percent on the back of high liquidity, strong oil prices, better-than-expected public revenues and rising investor confidence.

The index’s gains this year have been attributed to large increases by market leaders Saudi Telecom, SABIC and Saudi Electricity Co. (SEC).

Together with the nine listed commercial banks, the three companies make up more than 80 percent of the market’s value.

Prices of 26 firms increased, 35 companies dropped, while five issues were unchanged.

Three companies did not trade.

Trading value rose 19.1 percent to SR15.2 billion ($4.05 billion) from SR12.8 billion ($3.4 billion) last week.

Saudi Arabia has the largest capitalization of any Arab stock market with more than $128 billion, but operates only on an interbank basis.