JEDDAH, 19 January 2007 — The Saudi Capital Market Authority (CMA) has suspended trading in another loss-making company, Anaam International Holding Group, effective from tomorrow.
According to information available on the Tadawul website, Anaam, formerly Mawashi Mukairish, has made losses equaling 95 percent of its capital.
Anaam shares plunged 26.67 percent this week to close at SR16.50. The company was most active by volume also at 75,788,881. Anaam shares plunged 10 percent on Saturday, 9.88 percent on Sunday, 9.59 percent on Monday and 9.09 percent on Tuesday. However, its shares rebounded 10 percent on Wednesday before the CMA decision.
Prince Mishaal ibn Abdullah ibn Turki, chairman of the board of directors and executive president of Anaam, said that the suspension of the company’s shares based on the decision of the CMA would not negatively affect the company’s plans which are already in operation. He said the company would increase its capital to finance the new investment projects.
Earlier this week, the CMA suspended exchange of Bishah Agriculture Development Co. shares as a result of financial losses incurred by the company last year.
Nahed M. Taher, chief executive officer of Gulf One Investment Bank, told Arab News yesterday: “I believe that this decision should have been taken more than a year ago. However, it is never late and the decision of suspending shares of some of the losing companies from the stock market is definitely the right decision.
“The high burning ratio of such losing companies is significantly having a negative impact on the performance of the stock market as a whole through the loss of capital and high speculation increasing the risk premiums of volatility and uncertainty in the whole market. This in turn will prevent the stock market to get healthier financial position and getting back confidence in its role in economic development if the decision was not be made.
“The loss in stock market capitalization since the start of crash was over SR2 trillion which equals some of the last nine years of nonoil GDP.”
Basil M. Al-Ghalayini, CEO of BMG Financial Advisors, said: “Basically the CMA is trying to protect investors by taking these kinds of actions.”