AMMAN, 23 July 2005 — Most of Arab stock markets showed sharp volatility this week as a spate of speculation continued to dominate transactions despite emerging good results for the first half of the year, financial analysts said yesterday. However, they told Arab News that they were still upbeat over the future, as far as fundamentals of the markets were concerned.
“The slippage is mainly due to the fact that many of the stocks have been overvalued because of successive rises in their prices over the past months,” Wajdi Makhamreh, investment manager and head of brokerage at the Jordan Finance $ Investment Bank, said. “A wave of speculation is to blame for the latest declines, that were instrumental in kicking small and ill-experienced investors out of the market,” he added. Makhamreh and other analysts said they believed the semi-annual results “will help regional stocks to score fresh gains in the coming months”.
The Amman Stock Exchange witnessed its deepest profit taking move in several months this week. Nevertheless, the ASE all-share price index gained 1.36 percent, closing on Thursday at 7,731 points, after slipping on Monday to as low as 7,366 points, thanks to a 8.6 percent gain achieved by the heavyweight Arab Bank. The Arab Bank, which posted a 40 percent rise in its half yearly profits, accounts for about 40 percent of the market’s turnover. The Saudi stock market, the Arab world’s largest bourse, also recorded losses for the fourth week in a row. The Tadawul All Share Index (TASI) shed 2.9 percent this week to close on Thursday at 12,177.60 points after falling to 11,583 points on Monday.
“But in the last few days, the market took a U-turn recovering part of its losses, driven by strong Q2 profits of the Saudi Basic Industries Corp. (SABIC),” according to the weekly report of the Bakheet Financial Advisors.