JEDDAH/AMMAN, 20 January 2007 — The Saudi stock market plummeted further last week against the backdrop of a decision by the market’s watchdog, the Capital Market Authority (CMA), to suspend the trading of two firms for incurring heavy losses.

The Tadawul All-Share Index (TASI) shed 4.6 percent or 343.99 points last week, closing at 7,215.63 points from previous week.

The CMA suspended trading in Anaam International Holding Group effective from today.

Earlier last week, the CMA suspended exchange of Bishah Agriculture Development Co. shares as a result of financial losses incurred by the company last year.

The CMA Chairman Abdul Rahman Al-Tuwaijeri made it clear that the authority was determined to apply similar decisions across-the-board against all listed firms the losses of which exceed 75 percent of the capital, according to the law. But he expected such measures “to reflect positively on the market and enhance investors’ confidence”.

Al-Tuwaijeri said there was no delay in taking action against Anaam. “We have taken appropriate action against Bishah and Anaam as the CMA has the responsibility to protect the market and dealers,” he added. He said the authority would apply new laws to stabilize the market. “We are also in the process of introducing a new stock exchange system, list new companies on the bourse and launch a number of new initial public offerings in the coming months,” he said.

Al-Tuwaijeri said the CMA would intensify its system of monitoring of companies and dealers and set out regulations to make the market and companies more transparent. He confirmed reports on plans to transform the Tadawul into a joint stock company. “In the beginning the company will be fully owned by the Public Investment Fund. We are awaiting a Cabinet decision on this matter,” he said, adding that part of the company’s shares would be floated for public subscription later.

The Riyadh-based Bakheet Financial Advisors (BFA) said in their weekly report that investors “were still tense awaiting more blue chip annual results that could re-orient the market for the next phase”.

The stock market turnover also dropped to SR43.38 billion last week compared to SR55.6 billion in the previous week.

Saudi Dairy & Foodstuff Co. shares jumped 18.40 percent last week to close at SR37. Saudi Fisheries shares, however, plunged 27.50 percent to SR79.75.

Al-Babtain Power and Telecommunications Company shares fell slightly last week despite the company achieved SR77 million net profit in 2006 with a 17 percent increase compared to SR65.8 million in the previous year while the fourth quarter reports showed SR31 million profits, 51 percent increase compared to SR20.5 million in the same period in 2005. The operating profit in 2006 was SR83 million against SR70 million in the same period in the previous year with a 10 percent increase. The operating profit in the fourth quarter in 2006 was SR31.9 million against SR21.4 million in the same period in 2005, according to the information available on the Tadawul website.

Saudi Basic Industries Corp. (SABIC) shares declined 7.35 percent last week to SR94.50.

Arab stock markets reflected mixed performance as investors cautiously awaited the publication of 2006 balance sheets, but analysts said yesterday they believed regional shares could be “bottoming out” as a prelude for a rebound.

However, they said regional markets particularly in the Gulf region continued to be affected by geopolitics and the retreating crude prices on world markets.

“I believe Gulf markets continue to suffer from the political situation and the showdown over Iran’s nuclear program as well as from the declining oil prices,” Nizar Taher, head of brokerage at the Jordan Ahli Bank, told Arab News. “However, we believe regional markets are either bottoming out or nearing their bottoms and expect rebounds in the coming few weeks,” he said.

The Amman Stock Exchange (ASE) behaved differently from other regional stock markets this week and showed robust performance particularly over the past three days, led by the heavyweight Arab Bank, Taher said. The ASE all-share price index gained 5.49 percent last week, to close on Thursday at 5,832 points, according to the market’s weekly report.

“The ASE is driven by an optimistic mood that the 2006 results and dividends will be better than expected, particularly in the banking sector,” Taher said.

In Kuwait, the KSE all-share price index declined 3.1 per cent this week, closing at 9,796 points.

The benchmark price of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 0.7 percent last week, closing at 4,007 points from 4,036 points in the previous week.