JEDDAH, 16 February 2006 — Saudi stocks continued to surge and hit a record high yesterday. Thanks to market speculations, the Tadawul All-Share Index (TASI) is approaching the 20,000 mark like a streak of lightning as it closed yesterday at an all-time high of 19,853.94, up 155.33 points.
The Saudi Capital Market Authority (CMA), the watchdog of the Saudi bourse, said on Tuesday that most of this week’s trading was subject to speculative activities and this is what drove the prices of many stocks to high and unjustified levels. CMA said that most of the increase in share prices occurred in stocks of companies that did not disclose any news or information that justifies the increase in their share prices.
Salim J. Ghalayini, a Riyadh-based investment/financial consultant, told Arab News “The Saudi stock market crossed a new milestone of 19,853 on Wednesday coupled with a high trading volume. High trading volume normally points to speculations.”
CMA is becoming aware of suspicious high trading volumes in the market. On Tuesday, CMA blocked the investment accounts of an investor after it proved his engagement in speculative activities. According to CMA, the investor made many bid orders with large volumes to manipulate the prices of many listed companies.
According to Ghalayini, gradual reasonable growth is healthy, however, based on current PE ratio, further rapid increase in the Saudi stock market index will push it into a dangerous territory. The index gained 3,141.30 points or 18.80 percent so far this year.
The indexes of all sectors showed an increase in yesterday’s trading except that of banking and cement.
The market turnover broke SR46 billion barrier, as 53 out of 77 stocks traded edged higher while the rest declined yesterday.
For the second day in a row, the performance of the Banking Index was weak. The index closed lower yesterday at 47,923.28 as shares of major banks such as Al-Rajhi Bank and Samba Financial Group fell. Meanwhile, shares of SABB, Banque Saudi Fransi, Riyad Bank, The Saudi Investment Bank and Arab National Bank rose.
The Industrial Index was in a good condition as it edged higher by 213 points at 47,541.02. The index climbed despite the drop in the share prices of the petrochemical giant Saudi Basic Industries Corp. (SABIC), Saudi Arabia Refineries Co., Saudi Arabia Fertilizers Co., the National Company for Glass Industries and Saudia Dairy and Foodstuff Co. (SADAFCO).
The Cement Index is not picking up and it remained in the red zone for the second consecutive day. It was down as shares of all companies declined except Qassim Cement Co. The company remained the only gainer in the sector for the second day and its shares edged higher 2.91 points to SR1,450.
In the services sector, shares of Al Mawashi Al Mukairish United Co., Saudi Industrial Export Co., National Agriculture Marketing Co. and Tourism Enterprise Co. made hefty gains yesterday.
The Electricity Index jumped 346.95 points to 3,898.04 as shares of Saudi Electricity Co. (SEC) soared 9.77 percent to SR191.
The Telecom Index showed an increase as the shares of Saudi Telecom Co. closed slightly higher at SR1,167, whiles shares of Etihad Etisalat dropped.
The newly announced project of Etihad Etisalat to build the Kingdom’s largest fiber optics network did not stop the company’s shares from falling to SR794.
The Agriculture Index gained 744.19 points at 13,717.22 as shares of all companies in this sector rose yesterday.