JEDDAH, 20 September 2006 — The stock market took a tumble yesterday. The Tadawul All-Share Index (TASI) plunged 269.83 points or 2.39 percent to close at 11,037.7. Out of 81 stocks traded, only two — Saudi Fisheries and Saudi Hollandi Bank — were in the positive territory while all other stocks declined.
Over SR17 billion worth of shares changed hands yesterday.
TASI was down 214.14 points last week.
The Industrial index dropped 682.52 points or 2.87 percent to 23,101.78, Agriculture index edged lower 464.10 points (5.10 percent) to 8,627.60 and Banking index fell 440.16 points (1.41 percent) to 30,830.21.
Meanwhile, the initial public offering (IPO) of Saudi Real Estate Company will be from Sept. 24 to Oct. 4 as approved by the Capital Market Authority (CMA). Monday, Oct. 9 is the last day to make final allocation of shares and return surplus money to shareholders. SABB, Arab National Bank and Al-Rajhi Bank will receive applications of subscribers.
According to the National Commercial Bank’s (NCB) market review received here yesterday, the equity market continued its August rally through the first week of September as it gained another 3.1 percent over the 4.3 percent hike witnessed in August. The market however started slipping again in the second week of the month, losing 1.87 percent, which narrowed down earlier gains to a mere 1.2 percent by the close of trading on Sept. 13. This brought market capitalization to SR1.69 trillion, which represents nearly 145 percent of 2005 nominal GDP. The overall market, however, is still 33.96 percent down since the beginning of the year. The index reached an all-time high of 20,634.86 points on Feb. 25 this year.
The market turnaround in the first two weeks of September was largely broad based, with the exception of the banking and telecommunication sectors, which both saw decline in share prices of 2.1 percent and 0.8 percent respectively. On the other hand, share prices for the agriculture sector showed robust gains of 19.4 percent, with insurance following suit by climbing another 12.2 percent. The positive gains in the first-two weeks of September across other sectors give solid indications that share prices are consolidating and are set to rise over the coming months in an environment of intermittent volatility.
With a market turnover of SR305.9 billion and 5.75 million trade transactions, the average value per transaction was SR53,200 in the first two weeks of September, about 5.1 percent higher than the average for the whole month of August. The cumulative market turnover since the beginning of the year upto Sept. 13 reached SR4.34 trillion which accounted for nearly 105 percent of the total SR4.14 trillion achieved in 2005.
In 2006, the overall market turnover expected to surpass SR6.30 trillion, which will continue to strengthen the profitability of brokerage houses and banks providing share trading facilities.