JEDDAH/AMMAN, 11 November 2006 — The Saudi stock market continued to plunge for the second week running with the Tadawul All-Share Index (TASI) plummeting a further 9.66 percent or 901.25 points to close the week at 8,427.22 points, the lowest this year. The index closed previous week at 9,328.47 points.

TASI, which has lost about 21 percent over the past couple of weeks, is currently 49.6 percent lower than what it was at the beginning of the year. “Despite some resistance by blue chip companies, the TASI index came under fresh massive selling at the end of last week causing further stocks hammering,” said the Riyadh-based Bakheet Financial Advisors (BFA) in their weekly report.

“We believe that one of the main reasons behind this severe plunge is fear on the part of investors of continued sell-off of speculative grade stocks on limit down prices,” said the BFA, adding that they expected that the new level of low stock prices “would attract investors back again to the market.”

“However, it should be noticed that speculative trading that always causes an unstable and imbalanced market will keep long-term investors away from the market,” they said.

The stock market turnover also declined to SR42.54 billion last week compared to SR64.58 billion in the previous week.

Al-Rajhi Bank was most active by value last week at SR2.54 billion, followed by Red Sea Housing, which started trading on the Tadawul last Saturday, at SR2.38 billion and Saudi Basic Industries Corp. (SABIC) at SR2.32 billion. SABIC shares closed at SR105.25, down 3.22 percent for the week.

Red Sea Housing shares, which are trading in the services sector, closed 34.48 percent higher at SR78 after reaching as high as SR119 and a low of SR77 on debut. Shares of Saudi Advanced dropped 40.71 percent last week to SR117.25 and Saudi Fisheries by 40.69 percent to SR81.25.

Saudi Electricity Co. (SEC) was most active by volume at 59,574,881 as its shares closed 8.96 percent lower at SR15.25 last week.

Arab stocks also extended losses last week for what analysts described yesterday as a persistent spate of speculation and the absence of moving factors. But they expected regional bourses to witness rebounds in the coming couple of weeks with investors taking benefit from the “exceptionally low price” of shares.

“We think markets have been hammered by a persistent wave of speculation, the absence of moving factors and an inclination on the part of traders to keep away in a bid to avert further losses,” an Amman-based portfolio manager said, adding, “However, such exceptional low stock prices could provide a buy incentive for investors, who think they can reap speedy profits in the case of short-lived rebounds.”

Jordanian shares also extended losses last week as a tangible part of liquidity was shifted to the promising real estate sector, where indications of lucrative opportunities emerged over the past weeks, analysts said.

The all-share price index of the Amman Stock Exchange shed 0.92 percent to close the week at 5,918 points compared with 5,973 points the previous week, according to the ASE weekly report.

Kuwait’s KSE all-share price index lost 3 percent last week, closing at 10,396 points compared with previous week’s close at 10,763 points.

The all-share price index of Dubai stock exchange in the United Arab Emirates also dived 6 percent last week, closing at 378.65 points down from 402.99 points the previous week.