JEDDAH, 4 June 2005 — Saudi stocks showed volatility for the second consecutive week, whereby the Tadawul All-Share Index (TASI) slipped 4.5 percent in the first three days of the week, but rebounded later to close almost unchanged at 12,488.77 points on Thursday, the last day of trading.
With this record, the market rose 52.2 percent since the beginning of this year.
In their weekly report, the Bakheet Financial Advisors (BFA) attributed the market’s volatility to the fluctuation showed by the stock of the Saudi Basic Industries Corp. (SABIC), which account for about 25 percent of the market’s capitalization.
SABIC played a big role in moving the index as its prices continued to fall from the beginning of last week until last Tuesday to SR1,039 after analysts believed the company would not achieve this year the growth rate it had recorded last year.
There were also reports that the company would make losses as result of the danger posed by some of its products to environment. But SABIC has denied such reports and said its respected environment regulations of the United States and other countries.
SABIC recorded the highest sales accounting for 10 percent of the total shares traded.
The BFA expected investors to assume a “cautious, wait-and-see” approach in the coming weeks, pending the publication of the semi-annual results of listed firms, particularly petrochemical companies.
However, analysts who asked anonymity, expected “relative stability” to return to the Saudi market this week as rumors subsided.
However, the total value of shares exchanged last week was slightly down to SR95.9 billion ($25.6 billion) against SR96.2 billion ($25.6 billion) in previous week.
The week saw share prices of 56 companies rising while those of 16 going down.
Of the 10 top performing shares, the prices of Banque Saudi Fransi and Al-Rajhi Banking & Investment Corp. rose 1.9 percent and 1.7 percent respectively. The prices of Arab National Bank (ANB) and Saudi Telecom Co. (STC) fell 3.1 percent and 2.5 percent respectively.
Meanwhile, Arab stocks stand to score “gradual” gains in the coming weeks in the run-up for the release of the second quarter results expected to start to come out as of July 1, financial analysts said on Thursday.
They expected the real estate and tourism sectors to lead the market at the Amman Stock Exchange (ASE).
“I believe the real estate and tourism sectors will continue to lead the market for the coming months,” Saqr Abdul Fattah, investment manager at the Amman-based Housing Bank for Trade and Finance, told Arab News.
“This prediction is derived from the rapidly growing demand on land and apartments on the part of both Jordanians and Arabs and an expected upsurge in the number of tourists coming to Jordan this summer,” he said.
Abdul Fattah spoke against the background of a 10 percent rise in the price index of firms pertaining to tourism, investment and real estate sectors this week.
The ASE all-share price index climbed 5.21 percent this week, to close at 6,842.99 points, up from 6,308 points last week, according to the market’s weekly report. “Our expectations are still positive and we think there is potential for real estate and tourism sectors to prop up the market further,” Abdul Fattah said.
Kuwait’s KSE all-share price index shed 0.6 percent for the second week in a row, closing at 8,382.5 points, compared with last week’s close at 8,432.1 points.
Weak performance characterized several sectors, including the banking sector, as dealers were involved in more profit-taking moves, an Amman-based portfolio manager said.
In the United Arab Emirates, the benchmark prices of Abu Dhabi and Dubai stock exchanges fell 2.5 percent and 1 percent, closing at 5,613.6 points and 839.5 points respectively.
Egypt’s Hermes all-share price index fell 1.6 percent, closing at 36,056.23 points, down from 36,638.83 points last week.
— With input from Abdul Jalil Mustafa