JEDDAH, 10 September 2005 — The Saudi stock market retreated substantially last week for the first time in several weeks. The Tadawul All Shares Index (TASI) shed 3.9 percent in the week ending Thursday to close at 14,272.97 points from 14,858.35 points in the previous week.

The Bakeet Financial Advisors (BFA) attributed the decline to last week’s fall of oil prices due to the International Energy Agency’s decision to release 2 million barrels of oil per day for 30 days from the strategic oil reserves of member states.

The Saudi Basic Industries Corporation (SABIC) and the Saudi Telecom Co. (STC) “had the biggest impact on the index, slipping by 6.1 percent and 4.3 percent respectively”, the BFA said in their weekly report. SABIC’s shares closed on Thursday at SR1,538.25. STC shares were also lower at SR930.75.

TASI is currently 73.9 percent higher than the year’s start.

The BFA expected the Saudi stock exchange to be in a “wait-and-see mood during the coming few weeks” as investors monitor the Q3 2005 results of listed firms, particularly blue chips.

Many new dealers in the market have decided to sell off their stocks fearing that the index would fall further after it lost 585 points last week.

“We have seen a large number of new dealers who do not know how to react when the index fluctuate and these investors have contributed to the fall of the index,” Anas Al-Marhoumi, director of a major stock exchange said.

National Commercial Bank President Abdullah Bahamdan has urged NCB experts to innovate new products to absorb the Kingdom’s growing liquidity following the royal decree to raise salaries of public servants by 15 percent. He expected Saudi per capita income to reach SR40,000 after the salary increase, which comes into effect from the first of Ramadan.

An official source at the Capital Market Authority (CMA) said it would close all unlicensed stock exchange brokers in various parts of the country early next month. “The CMA took the decision to close such offices in order to protect investors,” the official told Al-Watan Arabic daily. The paper said a fund operator in a southern region had returned SR38 million to investors after CMA warning.

In other markets, in Kuwait, the KSE all-share price index gained 1.8 percent last week, closing at 9,819 points from 9,642 points previous week.

In the United Arab Emirates, the all-share price indexes of Abu Dhabi and Dubai stock exchanges rose by 1.7 percent and 5.7 percent, to close at 5,335.4 points and 1,131.5 points respectively.

Egypt’s Hermes benchmark price hit a record high of 44,843 points last week from previous week’s close at 43,182.

The all-share index of the Amman Stock Exchange fell marginally by 0.21 percent this week, closing at 8,042.33 points, according to the ASE weekly report.

“I believe attention of investors in the coming weeks to focus on blue chip firms with high returns, particularly industrial businesses,” Wajdi Makhamreh, director of investments and head of brokerage at the Jordan Finance & Investment Bank, said.

“Soaring oil prices are beneficial to all markets in the region including non-oil countries. This will give rise to huge surplus petrodollars that seek investment opportunities in regional bourses,” he said.

Jordanian shares came under profit taking pressures last week following reports that the heavyweight Arab Bank was facing new problems in the United States. Nevertheless, Makhamreh expected Jordanian stocks to score fresh gains in the coming weeks due to optimistic third quarter expectations and huge amounts of money drifting into the country from neighboring Gulf states.

— With input from Abdul Jalil Mustafa