JEDDAH, 16 July 2006 — The Saudi Arabian and Gulf stock markets plunged yesterday on concerns over escalating tension in the Middle East.
After falling over 9 percent last week, the Saudi market continued to plummet yesterday. The Tadawul All-Share Index (TASI) dropped 1,110.81 points or 9.36 percent to close at 10,757.61 points.
The TASI is down 34.3 percent since January. The drop comes after weeks of healthy gains following a plunge due to correction pressure.
Dr. Said Al-Shaikh, chief economist of the National Commercial Bank (NCB) told Arab News that “the fall in the stock market is due to the negative mood in the Gulf region. There is no change in the fundamentals.”
“Corporate results are good. Though profits are a little bit lower in the second quarter, overall profits are better in the first half of this year compared to the same period last year. Profits of banks and other companies are also satisfactory,” he added.
He said, “The expectations for profit of the listed companies are between 27 percent and 32 percent higher for the year 2006.”
Al-Shaikh said “the Saudi stock market will remain volatile for some time because of the political developments in the region. But I expect it to stabilize once the situation improves.”
All 81 Saudi stocks fell yesterday. The market turnover was also meager at SR6 billion. The major Banking and Industrial indexes bore the brunt yesterday and were down by 2,779.21 points at 30,254.94 and 2,551.13 points at 23,102.10, respectively.
Except some banking stocks, all other stocks declined by over 9.50 percent.