JEDDAH, 13 September 2005 — The Saudi stock market rose slightly yesterday as the Tadawul All Share Index (TASI) closed 21.53 points higher at 14,770.33.
A stock market investor said he expected the index to continue its upward march despite occasional fall in points. “The mood of most investors is good despite their fear of sudden stock purchases,” Mansour Al-Fahd said. He said the news of Saudi Arabia’s impending accession to the World Trade Organization would also encourage investors to put more money in stocks.
According to Walid Al-Nafie, another investor, dealers’ expectation of companies marking good third quarter profits would increase market liquidity.
The Banking, Telecom and Cement indices dropped by 127.78, 6.10 and 2.48 points, respectively. Most of the bank stocks were trading lower yesterday. Saudi Telecom Co. shares closed lower at SR946 while Etihad Etisalat shares were slightly up at SR624.25.
The Industrial index, however, closed at 39,028.97, up 181.36 points. Arabian Industrial Development Co. shares jumped 9.93 percent at SR321 followed by Alujain Corporation by 6.76 percent at SR363, Food Products Co. by 5.69 percent at SR199.75, Bishah Agriculture by 5.60 percent at SR287.50 and Al-Baha Investment and Development Co. by 5.07 percent at SR212.50. The National Industrialization Co. shares fell 2.39 percent to close at SR756.50.
Saudi Basic Industries Corp. (SABIC) shares were trading slightly higher yesterday at SR1,619.75.
Financial consultant Rashid Fouzan, however, would not advise investors to sell their SABIC shares to make quick money. According to him, the petrochemical giant would make substantial profits in the third quarter and its prices would go up further. He advised investors to keep their SABIC stocks until the end of this year. He said oil prices and economic developments would influence stock prices.
“The Saudi stock market has witnessed volatility during the past weeks. In fact, the Saudi all share index is currently below it’s all-time high of last month. The 15,000 mark turned out to be a challenging barrier to sail through,” Salim J. Ghalayini, a Riyadh-based investment/financial consultant told Arab News. “The main catalysts behind this decline and fluctuation are reduced investors’ interest due to travel/summer vacation, concerns about the impact of the Hurricane Katrina and flooding that hit New Orleans on the US economy and global markets, and the recent decline in oil prices,” he added.
The above might look like bad news for short-term investors. In reality this has provided an opportunity for market consolidation, and a delay for any “stock market bubble” that might be in the making.
“Year-end outlook looks good, supported by major government expenditures, continued high liquidity including the recently announced 15 percent salary increase, and the upcoming initial public offerings (IPO’s),” Ghalayini said.