JEDDAH, 24 November 2005 — The Saudi stock index crossed the 16,000 mark again after falling to 15,888.53 on Monday. The Tadawul All-Share Index (TASI) closed 89.43 points higher at 16,084.09 yesterday.
Rising shares of banks sent the Banking index up by 714.51 points at 40,926.33. Al-Rajhi Banking & Investment Corp. shares jumped by 3.54 percent at SR2,547, followed by Bank AlJazira by 2.62 percent at SR1,380.25 and Bank Albilad by over two percent at SR920.
The Industrial index, however, closed 121.95 points down at 39,147.03 as shares of major companies such as Saudi Basic Industries Corp., Sahara Petrochemical Co., Savola Group, Saudi Arabia Fertilizers Co., Saudi Chemical Co., National Industrialization Co., Saudia Dairy & Foodstuff Co. and Almarai Co. declined yesterday.
Fall in share prices of Saudi Electricity Co. at SR142.75 pulled the Electricity index down at 2,913.35 points.
The Telecom index was higher at 5,576.79 yesterday as shares of Saudi Telecom Co. and Etihad Etisalat were trading at SR903.50 and SR718, respectively.
The Agriculture index rose over 100 points yesterday at 6,452.74 as Bishah Agriculture shares jumped by 9.96 percent at SR488.50, Hail Agriculture by 3.27 percent at SR292 and Qassim Agriculture by 2.67 percent at SR308.
Abdul Rahman Al-Rashid, chairman of the Council of Saudi Chambers of Commerce and Industry, said the Saudi stock market required strong support and more transparency to improve its standard.
Addressing a stock market conference in Riyadh this week, he called for taking adequate measures in order to avoid stock market crash. He said the Cabinet decision to establish a new market for government bonds would create a new channel for Saudi investors.
The stock market conference, which is currently under way in Riyadh, has warned about mistakes that would incur heavy losses for investors. According to Yousuf Al-Qusanteeni, a stock market expert, lack of knowledge and training will put investors in trouble. He said taking large amounts of loans for investment in stocks was a risky venture.
Mark Hanson, head of corporate finance, Saudi Hollandi Bank, told Arab News that “the fact that the stock market is going up is not necessarily a good thing as 100 percent growth a year is not a good sign.” He was apparently referring to nearly 95 percent increase in Saudi stock index in 2005.
He added that next year when new listings will come they will absorb the liquidity so the market will start easing off with new listings.”
Hanson said at present “too much cash is chasing too little shares.”
He added that the Capital Market Authority (CMA) is playing a major role in terms of regulations up to international standards and high caliber staff in monitoring the stock market.