JEDDAH, 4 September 2005 — The Saudi stock market seems heading for a correction after hitting an all-time high as the Tadawul All Share Index (TASI) plunged over 400 points yesterday.
The 1,361.93 points or 3.48 percent drop in the Industrial index sent TASI falling by 402.72 points or 2.71 percent at 14,455.63.
Thim’ar shares plunged 8.04 percent at SR203, followed by Tihama Advertising & Public Relations Co. by 7.97 percent at SR297.25, Al-Baha Investment and Development Co. by 7.89 percent at SR175, Saudi Livestock by 7.77 percent at SR92 and Food Products Co. by 7.44 percent at SR183.50.
Saudi Basic Industries Corp. (SABIC) shares closed 3.65 percent lower at SR1,578.25. Sahara Petrochemical shares also closed 3.01 percent lower at SR442.50.
Saudi Electricity Co. (SEC) stock was most active by volume at 14,853,729 though it closed at SR135, down 3.23 percent.
Saudia Dairy and Foodstuff Company (SADAFCO) and Almarai Co. shares were lower by 3.01 and 1.75 percent at SR558 and SR840, respectively.
Analysts had earlier predicted that the index will cross 15,000 points mark in a couple of months but it looks like that it will take longer period to achieve that landmark. They said that the index will fluctuate with oil prices. After crossing $70 a barrel mark, oil prices started retreating in the later part of the last week.
World oil prices slumped on Friday as New York’s main contract, light sweet crude for delivery in October, fell $1.90 to close at $67.57 a barrel.
In London, the price of Brent North Sea crude for October delivery lost $1.66 to $66.06 a barrel. It hit a record $68.89 on Tuesday.
Dr. Tarek Kaushek, a stock market analyst, predicted that the index would be able to break the 15,000 barrier quite easily, despite the occasional downward swings. However, he expected the possibility of dealers hesitating to make exchanges expecting more corrections. In such cases, he said, people may opt for the stocks of leading companies such as SABIC, rather than those of smaller firms.
Seventy stocks were lower while only seven were higher out of 77 stocks traded yesterday.
The Banking index also dropped 439.61 points at 31,898.77 followed by Agriculture index which closed at 4,625.17, down 282.24 points. Eastern Agriculture shares declined 7.32 percent at SR186.75 followed by Gizan Agriculture shares which closed at SR289.50, down 7.21 percent.
The Telecom index Fell 172.42 points at 5,624.78. Saudi Telecom Co. (STC) shares closed 3.80 percent lower at SR935.50 while Etihald Etisalat shares were slightly higher at SR652.
All other indices were lower except Insurance sector index which closed slightly higher at 1,767.81 points. The National Company for Cooperative Insurance (NCCI) shares were slightly higher at SR637.25.
Meanwhile, according to a report carried by Al-Riyadh Arabic daily, the total value of shares exchanged last month reached SR411.83 billion or $109.8 billion compared to SR234.67 billion in July, 2005, registering 75 percent increase. Dealers exchanged more than 1.3 billion shares in August against 772 million in the previous month, the paper said.