JEDDAH, 16 October 2005 — After touching an all-time high on Wednesday, the Tadawul All Share Index (TASI) started its downward trend as it closed yesterday at 14,920.44, down 130.65 points.
The index fell 22 points at 15,051.09 on Thursday after hitting a record high of 15,073.09 previous day.
Only Services and Electricity indices were slightly higher. All other indices closed lower yesterday.
The Industrial and Banking indices were lower by 577.39 points at 39,579.02 and by117.92 points at 32,814.56, respectively.
Saudi Basic Industries Corp. shares fell 1.39 percent at SR1,628 as investors await its financial result which will be announced soon. Shares of Bank Aljazira, Saudi Hollandi Bank (SHB) and Al-Rajhi Banking & Investment Corp. were higher while shares of other banks fell yesterday.
SHB shares gained slightly at SR872.75 as it announced a net profit of SR276.6 million for the third quarter.
Saudi Automotive Services Co. shares surged 9.18 percent at SR666 yesterday, followed by Almarai Co. by 5.39 percent at 847.25 and Saudi Fisheries by 5.23 percent at SR327.25.
However, shares of Saudi Industrial Development Co., Food Products Co. and Zamil Industrial dropped by over 4 percent each to close at SR250, SR230.75 and 690, respectively.
The Saudi bourse will get a shot in the arm when shares of nine joint stock companies, with a total capital of SR54 billion, are floated next year, informed sources said. The new companies include the National Petrochemical Company (Yansab), Riyadh Cement Company, Kiyan Petrochemical Co. and Saudi International Petrochemical Company, the sources said.
Talaat Hafiz, a financial expert, said the Saudi stock market could accommodate 300 to 500 companies in the coming years, adding that growing liquidity of Saudis demands more companies. He said the listing of more companies would strengthen the market and prevent the flight of Saudi funds to neighboring markets.
Meanwhile, according to Trowers & Hamlins, the international law firm, the value of rights issues on Gulf equity markets in the first three quarters of 2005 has rocketed to $9.1 billion, more than ten times the level of the whole of last year.
The willingness of Gulf-based companies to raise finance to fund organic growth and acquisitions combined with the soaring demand amongst investors for shares in Middle Eastern companies are the twin drivers of the current funding bonanza, Trowers & Hamlins said in its research.
Further issues are expected to push the total value of Gulf rights issues during 2005 to more than 20 times the 2004 level, or approximately $15 billion.
M&A deals involving Middle Eastern companies in the first six months of this year more than doubled to $13.4 billion.