JEDDAH/AMMAN, 31 March 2007 — The Saudi stock market plunged last week that was fueled by profit-taking pressures on the part of scared investors who wanted to evade further losses.

The Tadawul All-Share Index (TASI) plummeted 7.84 percent last week, closing at 7,889.74 points, down from 8,560.82 points previous week.

The Riyadh-based Bahkeet Financial Advisors (BFA) expected the first quarter results, particularly of blue chip firms, to represent the market’s “driving engine” for the coming few weeks.

“Speculative stocks will continue their downward trend until the corporate results are out, against the expectation that they will suffer further losses,” the BFA weekly report said.

Other analysts blamed “rumors about imminent collapse of the market” for last week’s plunge.

Salman Al-Nuwaiser, a stock market dealer, said the recent developments would only lessen confidence in the market. “The index was on the decline since last Monday and major speculators exploited the positive news from the Capital Market Authority (CMA),” he said and urged the CMA to limit its role to supervision, leaving the market to demand and supply factor.

Saleh Al-Khaledi, another dealer, blamed the CMA for the spread of speculations in the market. “This means that our bourse lacks transparency,” he said, adding that all dealers must have access to relevant information.

Salem Al-Bahdel urged Tadawul to provide latest information through its website. “We don’t need old information that has already been discussed by Internet clubs,” he added. The only gainers last week were Arriyadh Development and Samba Financial Group as their shares soared by 7.87 percent to SR24 and 1.54 percent to SR148 respectively.

Shares of Banque Saudi Fransi dropped 41.76 percent last week to SR77.75, followed by Tabuk Cement by 28.44 percent to SR39.

Saudi Basic Industries Corp. shares fell 7.20 percent last week to SR116.

The stock market turnover also declined sharply last week. The value of traded shares reached SR80.33 billion compared to SR109.29 billion in the previous week.

The most active by value last week was Aldrees Petroleum & Transport Services Co. as over SR3.93 billion worth of shares changed hands, followed by Saudi Fisheries at SR3.39 billion.

In the telecom sector, shares of Saudi Telecom Co. (STC) plunged 10.88 percent to SR65.50 and Etihad Etisalat by 13.31 percent to SR53.75. Arab stock markets lost tangible ground last week amid a fresh spate of speculation, declining liquidity and panic sell-offs as the first quarter of the year drew to an end, financial analysts said yesterday.

However, they expected regional shares to pick up in the coming couple of weeks, saying low stock prices “should lure investors to buy”.

“I believe panic sell-offs, tangibly diminishing liquidity and retreating confidence were behind this week’s plunge that was led by the Saudi bourse,” an Amman-based portfolio manager told Arab News.

“The decline was apparently aggravated by the forced liquidation of margin investors’ positions,” he said.

Analysts expected a rebound in most of regional stock markets during the coming couple of weeks, particularly with the publication of first quarter results.

Jordanian shares lost ground for the second week in a row led by the heavyweight Arab Bank, which was scheduled to hold its annual meeting of shareholders yesterday. “I believe the direction of the Amman Stock Exchange (ASE) will depend to a large extent on whether the Arab Bank meeting is going to adopt the distribution of bonus shares,” said Nizar Taher, head of trading at the Jordan Ahli Bank. The ASE all-share price index shed 3.06 percent last week, closing at 6,149 points, down from 6,343 points last week, according to the market’s weekly report.

Kuwait’s KSE all-share price index fell 0.8 percent last week, to close at 10,222 points compared with previous week’s close at 10,303 points.

The unified all-share price index of the Arab Emirates stock exchanges of Dubai and Abu Dhabi also shed 1 percent last week, closing at 3,846 points from 3,882 points in the previous week.

The GulfBase GCC Index also dropped 4.78 percent last week to 4,942.82 points. The value of GCC traded shares declined 26.69 percent to $25.30 billion last week.