JEDDAH, 10 May 2006 — The Saudi stock market plunged yesterday despite the Capital Market Authority’s efforts to ensure the continued stability, increased strength and sustained growth of the Saudi capital market.

The Tadawul All-Share Index (TASI) dropped 778.39 points or 6.84 percent to close at 10,598.50 yesterday.

While addressing the Euromoney conference on “Building the Future” in Riyadh yesterday, Jammaz Al-Suhaimi, chairman and chief executive of the CMA, said “We want to ensure the continued long-term stability of our capital markets, while recognizing that some short-term volatility is to be expected given the nature of efficiently functioning markets that compete in broader international marketplace for capital.”

The Saudi stock index has plunged almost 50 percent after reaching an all-time high of 20,634.86 points on Feb. 25 this year. The market is down 36.58 percent or 6,114.14 points so far this year.

Over SR11.46 billion worth of shares changed hands yesterday; out of 79 companies traded, only six edged higher.

Abdul Rahman Al-Zamil, a Shoura Council member and an economic expert, urged the CMA not to allow newly established companies to sell their shares in IPOs.

“The initial public offering of such companies must be delayed until they set up their infrastructure and start their activities,” he said. He said the present practice of holding IPOs of non-productive companies would have a negative effect on the market.

Yesterday, the Industrial and Banking indexes suffered heavy losses. The Industrial Index closed 1,900.88 points down at 21,772.74 and the Banking Index lost 1,420.07 points to 32,251.87.

In the banking sector, shares of Al-Rajhi Bank, Bank Albilad, Samba Financial Group, Saudi Hollandi Bank, Riyad Bank and Bank AlJazira declined, while shares of other listed banks rose yesterday. Shares of all companies in the industrial sector were in the red.

Shares of the bellwether Saudi Basic Industries Corp. suffered 7.37 percent fall to close at SR144.50.

In the telecom sector, shares of Saudi Telecom Co. (STC) and Etihad Etisalat fell 9.27 percent to SR102.75 and 9.51 percent to SR69.50, respectively. In the agriculture sector, shares of Saudi Fisheries rose 9.66 percent to SR39.75, while shares of all other companies dropped sharply.