RIYADH, 1 January 2003 — Saudi shares resisted growing war jitters over neighboring Iraq to close 2002 yesterday up, mainly on strong oil prices, improved budget figures and high liquidity levels, analysts said.
The Tadawul All-Shares Index (TASI) finished the year on 2,518.08 points, up 3.6 percent on the 2001 closing of 2,430.11 points. The index finished 2001, 7.6 percent higher on the previous year despite the Sept. 11, 2001 attacks.
TASI made most of the gains in the first half of the year when the index hit 2,927.23 points on May 20, an all-time record, up 20.4 percent on the end-2001 closing.
But the index lost most of the initial gains because of the war fears and concerns that a government privatization plan may absorb liquidity from the market, Bakheet Financial Advisors (BFA) reported.
The year witnessed a number of important economic measures which included the Shoura Council passing the draft capital market law calling for a formal stock exchange to be established to replace the existing interbank market.
In November, the government announced a plan to open up 20 vital sectors for the private sector. It also began the largest shares sell-off in two decades by offering 30 percent of Saudi Telecom for subscription. The sale will generate $4 billion.
Market turnover rose sharply to SR133.5 billion ($35.6 billion), up almost 60 percent over last year’s SR83.7 billion ($22.3 billion). Turnover in 2000 reached SR65.3 billion ($17.4 billion).
The value of average daily trading reached SR479 million ($127.7 million), up on the $81 million last year.
The number of listed firms dropped from 77 to 68 following the merger in May of 10 small electricity companies into the Saudi Electricity Company (SEC). The price of 53 companies rose, 12 went down and one did not change while two issues did not trade. Blue chip gainers were led by Saudi Chemicals Co. which rose 260.5 percent, Saudi Cement Co. up 42 percent, and National Industrialization Co. and Saudi Investment Bank, up 36.5 and 24 percent respectively. The Saudi French Bank rose 22.6 percent, Arab National Bank 18 percent and Riyad Bank 17.5 percent.
The major losers were the Saudi Arabian Fertilizers Co. which shed 21.9 percent, the Saudi American Bank (SAMBA), the largest listed bank, 20 percent and Al-Rajhi Banking and Investment Corp. (ARABIC), which lost 9.7 percent. The Saudi Basic Industries Corp. (SABIC) also lost 3.1 percent during 2002.
SABIC remained the largest capitalized stock with $12 billion, followed by SEC with $8.9 billion and SAMBA at $7.5 billion.
The value of the market is 40 percent of the Kingdom’s gross domestic product (GDP) which reached $185.3 billion at the end of 2001. TASI has the highest capitalization of any stock market in the Arab world at about $75 billion at the end of trading in 2002, but operates only as an interbank system.
Meanwhile, the Kuwait Stock Exchange (KSE) ended 2002 a whopping 39 percent up on the previous year but economists warned that 2003 did not bode well for another lucrative year due to the likelihood of war in neighboring Iraq.
The KSE index closed the year yesterday at its highest level since March 1998, ending on 2,375.3 points. Last year the index closed 26.8 percent up on 2000 while 2002 had initially been predicted as a slow year for the market.
Increased cash flows drove the total trading value up 86.5 percent this year to around 6.6 billion dinars ($21.9 billion).
A total of 27.83 billion stocks were traded this year, up 70.8 percent on 16.28 billion last year. The daily average trading on the KSE for 2002 was $86.4 million, nearly doubling on $48 million in 2001. (AFP)