JEDDAH, 6 September 2005 — The Saudi stock market suffered 89.73 points fall yesterday as most of the indices declined except the Electricity index which gained 122.45 points to close at 2,959.25.
The Tadawul All Share index closed at 14,518.17, down marginally 0.61 percent.
The major Industrial index dropped 499.67 points at 37,769.58 followed by Telecom index which lost 66.69 points to close at 5,619.90. The Cement index also fell 63.54 points at 8,688.76. Saudi Basic Industries Corp. shares closed 1.35 percent lower at SR1,576.
Saudi Electricity Co. (SEC) shares jumped 4.86 percent at SR145.75, followed by Mubarrad, up 3.23 percent at SR223.50 and Saudi Fisheries by 2.20 percent at SR290.
The National Shipping Company of Saudi Arabia’s shares dropped 2.87 percent to close at SR329.50, followed by SAFCO by 2.34 percent at SR939 and Saudi Industrial Services Co. (SISCO) by 2.33 percent at SR210.
Saudia Dairy and Foodstuff Co. (SADAFCO) and Almarai Co. shares declined slightly at SR557 and SR843, respectively.
Saudi Telecom Co. (STC) and Etihad Etisalat shares also fell to SR939.50 and SR636.50, respectively.
Dr. Abdul Rahman Al-Humaid, an economist, said the stock market was heading for major correction process, adding that only powerful companies would be able to stand it. He said many small companies would leave the market, especially after the Capital Market Authority banned unlicensed firms from dealing in stocks. He said the CMA decision would make the market more organized and inject investor confidence.
Al-Humaid said the CMA move would also affect stock prices and profits, adding that the index was driven up in past weeks mainly because of speculative trading. “Unlicensed stock brokers have played a big role in this respect by flattering prices and giving undue value to some companies,” he pointed out. “This means only strong companies can withstand the correction process,” he explained.