JEDDAH, 18 February 2006 — The Saudi stock market continued its upward trend for most of the week backed by speculative trading, but prices nose-dived on Thursday on profit-taking when the Tadawul All-Share Index (TASI) hit an all-time intra day trade high of 20,079.8 points. The weekly market turnover jumped to SR244 billion compared to SR212.36 billion in the previous week.
A sell-off pushed down prices sharply with TASI closing the week at 19,431.32 points, which represents a 0.6 percent or 108.80 points decline from last week’s close at 19,540.12 points TASI is currently 16.27 percent higher than the year’s start.
On Thursday, all the indexes went red with Banking and Agricultural indexes leading the drop. The Banking Index plunged 1,093.43 points to 46,829.85 points and Agricultural Index by 1,183.30 to 12,533.92 points. In terms of percentage change, the three main indexes which got affected were the Agricultural, Electrical and Services indexes. The Agricultural Index went down by 8.63 percent followed by the Electrical Index which lost 7.33 percent of its points. The Services Index, which came third, declined by 4.33 percent. The least affected index was the Industrial which lost only 0.14 percent of its points.
The prices of 92 percent of the shares traded in the Saudi stock market went down on Thursday leaving only six gainers; one in Banking sector, four in Industrial sector and one in Cement sector. The gainers were the Saudi Hollandi Bank, Saudi Basic Industries Corp., Saudi Arabia Fertilizers Co., Saudi Pharmaceutical Industries & Medical Appliances Corp., Food Products Co. and Qassim Cement. The Qassim Cement share prices remained in the green area for the third consecutive day, and on Thursday it was the only share in the Cement sector which made gains.
The Riyadh-based Bakheet Financial Advisors (BFA) expected the market to remain “watchful on the next trend” as portfolio managers assess the implications of that drop. BFA also expected investors to “continue the sell-off” of their holdings of speculative stocks, most of them fell the total 10 percent allowed by the market’s laws on Thursday.
Meanwhile, a spate of profit-taking moves raided major Arab stock markets last week and analysts said on Thursday the trend could continue for the coming couple of weeks before a fresh rebound that precedes the release of first quarter results. They attributed the decline mainly to the fact that prices of regional stocks had reached unprecedented levels which appeared to be not sustainable by the current factors.
Kuwaiti stocks also retreated after the KSE all-share price index crashed the psychological barrier of 12,000 points on Tuesday for the second week in a row.
A profit-taking move pushed the benchmark price down by 2 percent to close week at 11.756.9 points, compared with previous week’s close at 11.999.8 points.
The United Arab Emirates stock exchanges, which were the scene of successive losses over the past couple of months, recovered last week apparently after traders decided to make benefit from the exceptionally low prices, an Amman-based portfolio manager said.
The unified UAE all-share price index of the Dubai and Abu Dhabi bourses gained 1.4 percent last week, closing at 6,035 points up from 5,297 points previous week.