JEDDAH, 16 July 2005 — The Saudi stock market continued its downward trend for the third consecutive week as the Tadawul All Shares Index (TASI) closed on Thursday at 12,538.87, losing 90.19 points or 0.71 percent, which is 1.5 percent down compared to last week.

Saudi stocks witnessed sharp volatility due to fluctuations in the prices of leading banks, the Saudi Basic Industries Corp. (SABIC) and the Saudi Telecom Co. (STC), the Bakheet Financial Advisors (BFA) said in its weekly report.

The shares of SABIC, which dominates the market, closed on Thursday at SR1,207.50 after trading at SR1,168 on Saturday, the first day of trading.

STC stock closed on Thursday at SR889.50 after crossing SR900 on Wednesday. On Saturday it closed at SR873.50.

Out of 76 symbols traded on Thursday, only 13 were up and 59 were down.

The Banking Index closed on Thursday at 29,913.16, down from Saturday’s closing of 30,053.92 points. The Telecommunication Index was higher at 5,278.29 points on Thursday from 5,166.06 on Saturday.

On Tuesday, the TASI fell to 12,101.10 points, the lowest since mid-May, as a result of declining bank stocks despite good half yearly results posted by three major banks.

But on Wednesday, the market regained its strength as the index rose by 4.36 percent to 12,629.06 points with SABIC prices rising 8.4 percent.

Prices of STC shares soared by 4.6 percent on expectations of substantial half yearly profits. However, STC has announced net profits of SR5.914 billion in the first half of 2005, newspapers reported yesterday.

Out of 75 shares traded on Wednesday, only two were down and 72 shares were higher.

However, the index rose by 52.8 percent since the beginning of this year.

The total value of exchanged shares fell to SR48.7 billion from last week’s figure of SR59.0 billion, with SABIC accounting for 12 percent of sales, followed by Qassim Agriculture 10 percent and SAPTCO eight percent. The week saw prices of 10 companies soaring while that of 66 firms falling.

Meanwhile, Standard & Poor’s Ratings Services said last week it revised its outlook on the National Company for Cooperative Insurance (NCCI) to positive from stable. At the same time, Standard & Poor’s affirmed its ‘A-’ long-term counterparty credit and insurer financial strength ratings on the company.

The ratings reflect NCCI’s positive management, very strong competitive position, very strong capitalization, and very strong liquidity, as well as the potential for growth in the Saudi insurance marketplace. These positive factors are offset by NCCI’s heavy exposure to equity investments and potentially volatile operating performance.

The positive outlook reflects Standard & Poor’s expectation that NCCI will retain its dominant market position as the newly regulated and restructured Saudi insurance market matures, and that earnings develop as favorably as forecast by the company, particularly for the medical account.

Operating performance will remain good, with a combined ratio below 100 percent and average ROE higher than 10 percent.

The NCCI stock closed on Thursday at SR587, down from SR597 on Saturday.

Arab stock markets are expected to remain “volatile” in the coming couple of weeks as investors await the publication of half-yearly results of leading businesses, financial analysts said yesterday.

“I believe volatility will dominate markets in the coming two weeks pending the publication of the second quarter results, mainly of blue chip firms,” a portfolio manager based in Amman told Arab News, asking anonymity.

“The general mood is still positive, but we cannot rule out periodical profit taking moves that push down prices thus providing buy opportunities,” he added.

This week’s fluctuations at the region’s key markets of Saudi Arabia, Jordan, Kuwait and Egypt were attributed by analysts mainly to “speculation and varying readings” of semi-annual profits that started to come out over the past few days.

In Kuwait, the KSE all-share price index edged up last week closing at 8,712.4 points, with selective buying dominating transactions that focused mainly on banking and investment fund shares, dealers said.

The UAE stock markets also continued to lose ground for the second consecutive week. The all-share price indexes of Abu Dhabi and Dubai bourses fell 2.7 percent and 6.4 percent to close at 5,302.4 points and 921.2 points respectively.

The all-share price index of the Amman Stock Exchange shed 0.14 percent in the week ending Thursday, to close at 7,628 points, compared to 7,639 points last week, according to the ASE weekly report.

The heavyweight Arab Bank, which accounts for 40 percent of the benchmark price, gained 8 percent this week, propelled by reports that the Arab Bank Group had posted 40 percent rise in profits in the first half of the year.

However, most of other firms lost ground following the government’s decision to hike fuel prices that led to similar rises in prices of hundreds of goods in the country.

Egypt’s Hermes benchmark price gained 1.4 percent this week, to close on Thursday at 42,952 points, up from 42,342 points last week.

— With input from Abdul Jalil Mustafa