JEDDAH, 24 April 2006 — The Saudi stock market continued its downward trend yesterday. The Tadawul All-Share Index (TASI) dived 1,039.88 points or 7.93 percent to close at 12,076.74. The index is down 27.74 percent so far this year. TASI reached an all-time high of 20,634.86 points on Feb. 25.
The major Industrial and Banking indexes bore the brunt yesterday as shares of major companies fell sharply. The Industrial index closed 2,672.90 points lower to 24,543.50 while the Banking index was down 2,283.75 at 37,070.97. Over SR8.33 billion worth of shares changed hands compared to SR11.79 billion on Saturday.
Muhammad Shams, director of the Economic Feasibility Studies Center, said it had been difficult reading the market since the index started falling down on Feb. 26. “This has created a situation that has made it difficult to predict the market’s future trend,” he said. Shams said stock prices were not responding to good news such as mergers of companies and strong first quarter profits and free distribution of shares.
He emphasized the need for the Capital Market Authority to change its attitude toward major speculators. “There should be flexibility in dealing with them as they can control prices,” he added.
Shares of petrochemical giant Saudi Basic Industries Corp. (SABIC) plunged 10 percent to SR164.25 despite it having approved an increase of capital to SR25 billion by distributing one share for each four shares held to shareholders on record as at the end of Saturday’s trading.