JEDDAH/AMMAN, 21 October 2006 — Saudi and other Arab stocks lost momentum last week ahead of the Eid Al-Fitr holidays, but analysts said yesterday they expected regional markets to rebound after the fasting month of Ramadan.
Saudi shares were the biggest losers in the region last week amidst reported disappointment over the third quarter results.
The Tadawul All-Share Index (TASI) plummeted 4.05 percent last week, closing at 10,545.35 points down from 10,989.99 points previous week.
TASI is currently 36.9 percent lower than the year’s start, according to the weekly report of the Bakheet Financial Advisors (BFA).
“The market was negatively impacted by the earnings reported by most investment companies in the third quarter of the year,” the report said.
BFA expected investors “to re-arrange their portfolios” in accordance with the released results and projected performance of listed firms. “We also expect the market index to move horizontally mixed with some fluctuations until new positive announcements are released,” they said.
The stock market turnover also declined last week to SR61.29 billion from SR93.70 billion in the previous week.
Emaar Economic City (EEC) was most active by value last week as shares worth SR4.68 billion changed hands last week, followed by Saudi Fisheries at SR2.69 billion, Eastern Agriculture at SR2.47 billion and Jazan Development at SR2.38 billion.
Jazan Development was also top gainer last week as its shares jumped 8.78 percent to close at SR71.25.
Emaar Economic City shares edged lower by 13.70 percent to SR31.50 last week.
Shares of Savola Group plunged 31.76 percent to close at SR86.50 last week. Saudi Fisheries shares also dropped 20.85 percent to SR130 and Bishah Agriculture by 17.29 percent to SR220.
Despite 12 percent increase in Saudi Basic Industries Corp.’s (SABIC’s) third quarter net profit, its hares fell 6.11 percent last week to SR126.75.
In the banking sector, shares of seven listed banks dropped while shares of three banks - Saudi Hollandi Bank, Banque Saudi Fransi and Al-Rajhi Bank - rose last week.
“Markets were subdued mainly because of wide reshuffle of positions and profit taking moves which investors preferred to conduct before the Eid Al-Fitr feast,” Wajdi Makhamreh, deputy CEO of the Osoul Brokerage Co. told Arab News.
“However, we believe markets will gather momentum after the Eid holiday, when fresh liquidity is expected to be pumped into stock markets,” he said.
Makhamreh said that over the past few months regional investors adopted a speculative strategy of “hit-and-run” approach that excludes holding stocks for long periods of times.
As for Jordanian shares, Makhamreh said the Amman Stock Exchange (ASE) still enjoyed “positive factors”, including the third quarter results, which he expected to represent a driving force after Ramadan.
The ASE all-share price index closed week on Thursday flat at 6,139 points compared with 6,136 points last week, according to the market’s weekly report.
Portfolio managers said they expected the Arab Bank profits released yesterday to have a positive impact on Jordanian stocks when the market re-open on Sunday, the last trading day before a weeklong holiday.
The Arab Bank Group scored a 28.3 percent increase in net after-tax profits in the first three quarters of the year, to $494.9 million from $385.8 million in the same period of last year, the Arab Bank’s Chairman Abdul Hamid Shoman said yesterday. Shoman also reported a 47.1 percent increase in the group’s net earnings in the third quarter of the year relative to the second quarter. The Arab Bank Group, one of the Arab world’s largest banking establishments, operates in more than 30 countries across the globe.
In Kuwait, the KSE all-share price index gained 0.5 percent last week, to close at 10,497 points compared with previous week’s close at 10,445 points.
Nasser Al-Nafeesi from the Kuwait-based Joman Consultants Center expected the market to “rebound after the Eid holiday” propelled by the third quarter results which he said came better than the second quarter.
The all-share index of the United Arab Emirates stock exchange of Dubai declined by 1.9 percent last week, closing at 428.99 points from 437.16 points previous week.
Abu Dhabi Securities Market (ADSM) announced on Thursday that the market would close for the Eid holiday from today.
If the first day of Eid Al-Fitr falls tomorrow, ADSM will be closed until Tuesday. The market will re-open on Wednesday.
If the first day of Eid falls on Monday ADSM will be closed until Thursday. It will re-open on Oct. 29.