JEDDAH/AMMAN, 10 June 2006 — The Saudi stock exchange fluctuated violently last week with the comeback of the speculation fever that was mainly responsible for the drastic drop in the value of Saudi stocks since the beginning of the year.

The Tadawul All-Share Index (TASI) gained 3.30 percent or 383.08 points last week, closing on Thursday at 11,994.01 points, up from 11,610.93 points in the previous week.

On Thursday alone, the index gained 585.94 points or 5.14 percent compared to Wednesday’s closing. TASI is currently 28.2 percent lower than the year’s start.

The value of traded shares broke the SR150 billion barrier last week, highest since the crash, compared to SR102.89 billion in the previous week.

The most active by value last week were Saudi Electricity Co. at SR8.83 billion and Saudi Basic Industries Corp. (SABIC) at SR7 billion. Over SR5 billion worth of Savola Group shares traded last week.

The top gainers for the week were Al Mawashi Al Mukairish United Co., up 49.37 percent, followed by Saudi Dairy and Foodstuff Co. (47.65 percent), Al-Baha Investment & Development Co. (34.23 percent), Saudi Industrial Development Co. (30.40 percent) and Saudi Cable Co. (30.36 percent).

Al-Ahsa for Development Co. was top loser last week as its shares dropped 11.15 percent to SR57.75.

The Riyadh-based Bakheet Financial Advisors (BFA) expected the second quarter corporate results to “determine the market’s trend” in the coming weeks.

The report, however, cautioned, “random speculation still threatened the market’s health.”

Saudi analyst Turki Fadaak predicted Saudi shares would show “more steadiness” when the benchmark price crosses the 12,000-point level.

Meanwhile, Middle East stock markets are expected to remain “volatile” in the coming couple of weeks due to nervous trading and the continuation of the speculation fever, financial analysts said yesterday.

However, they told Arab News that regional bourses “stood to gain” in the medium and long terms from the huge surplus petrodollars expected to accrue from surging crude prices and from the second quarter results, which were expected to be better than those of the first quarter.

“I believe regional markets will remain volatile and lack steadiness in the coming weeks as investors stick to the short-breathe transactions and speculative behavior and ignore fundamentals of listed firms,” said Wajdi Makhamreh, head of trading and brokerage at the Jordan Finance & Investment Bank.

“However, prices of regional stocks have gone down to levels where they provide buy opportunities,” he added.

Makhamreh said that he expected regional bourses to make benefit from tens of billions of oil income surpluses that Arab Gulf states prepared to receive in 2006.

The United Arab Emirates shares plummeted again last week in what analysts described as a profit-taking move that followed continuous gains in the past three weeks.

The unified all-share price index of the Dubai and Abu Dhabi stock exchanges lost 9.1 percent last week, closing at 4,589 points compared with 5,035 points in the previous week.

Kuwait’s KSE all-share price index gained 1 percent, closing at 10,340 points up from 10,239 points in the previous week.

The Kuwait-based Al-Shall consultancy bureau warned against the negative effects of the “political financing” implied in the behavior of the state-owned Public Investment Corporation (PIC).

The PIC reportedly intervened in the market over the past few weeks to shore up price through buying stocks, after prices fell dramatically due to the political standoff that led to the dissolution of Parliament and calling new polls later this month.

The All-Share price index of the Amman Stock Exchange shed 1.71 percent last week, closing on Thursday at 6,662 points, compared with previous week’s close at 6,777 points, according to the ASE weekly report.

Makhamreh predicted active trading at the ASE in the coming couple of weeks ahead of the release of the mid-year results.