JEDDAH, 3 September 2005 — The Saudi stock market was volatile last week, with the Tadawul All Share Index (TASI) edging up 24.66 points at 14,858.35 from 14,833.69 points previous week.
TASI is currently 81.1 percent higher than the year’s start. The Saudi stock index crossed the 15,000-point barrier on Monday, propelled by crude prices that crossed the $70 per barrel that day due to Hurricane Katrina, before easing slightly at 14,900.86.
“This indicates that Saudi investors maintain strong linkage between stock prices and oil prices,” the Bakheet Financial Advisors (BFA) said.
The BFA predicted a decline in prices of speculative stocks which scored “unjustified sharp gains” last week. The TASI suffered 66.54 points fall on Tuesday at 14,834.32.
Saudi financial analysts and investors said Tuesday’s corrective fall of the index was an indication of its preparation for a big jump to cross the 15,000 mark.
Saud Al-Khamees, a financial consultant, said the minor downward move would give the index the power to go up in the coming days.
Khaled Al-Shaddi, an investor, said there are strong indicators showing the market would improve further and dealers would make good profits. He said Saudi Basic Industries Corp. (SABIC) continues to play a leading role in moving the index, especially as a result of skyrocketing oil prices.
Informed sources at the Capital Market Authority (CMA) told Asharq Al-Awsat, a sister publication of Arab News, that unlicensed brokers were exchanging stocks worth more than SR1 billion ($267 million).
Meanwhile, many Saudi stock dealers have expressed their satisfaction over the growing oil prices following the shut down of oil facilities in the US as a result of Hurricane Katrina, saying it would have positive effect on the stock market and Saudi economy.
The Industrial index was down 50.45 points at 39,158.98 on Thursday and the Cement index suffered 20.17 points fall at 8,874.65. The Banking index recovered slightly at 32,338.38.
The Agriculture index closed Thursday at 4,907.41, up 33.29 points. Hail Agriculture shares soared 4.70 percent at SR218 but Gizan Agriculture shares dropped 1.42 percent to close at SR312.
Regional stocks showed also volatility last week, but analysts predicted bourses were generally in a consolidation phase ahead of scoring fresh gains on the backdrop of optimistic third quarter expectations and soaring oil prices, financial analysts said yesterday.
“We believe regional stock markets are in a consolidated phase with investors optimistic over the future, particularly third quarter results,” an Amman-based portfolio manager told Arab News.
“I think bourses will continue to derive benefit from the good semi-annual profits of listed firms and surging oil prices that indicate huge surplus petrodollars will accrue for Arab oil-rich states this year,” he said.
The Amman Stock Exchange also witnessed sharp fluctuations this week. However, the ASE all-share price index gained 1.85 percent, closing at a record high of 8,159 points up from 8,011 points last week, according to the market’s weekly report.
In Kuwait, the KSE all-share price index moved up 1.6 percent, closing at 9,642 points, compared with previous week’s close at 9,493 points.
Egypt’s Hermes all-share price index climbed 3.5 percent last week, closing at 43,182 points on Thursday.
Dealers reported a buying scramble at the Egyptian market in the last hour of trading on Thursday after investors assumed caution throughout the week. “Investors apparently preferred to end the week with share holdings ahead of next week’s presidential elections in the country,” a dealer said.