JEDDAH/AMMAN, 21 July 2007 — Saudi shares were volatile last week as corporate results for the first six months of the year continued to come out.
The Tadawul All-Share Index (TASI) gained 0.67 percent last week, closing at 7,501.56 points, up from 7,451.38 points in the previous week. TASI is currently 5.4 percent lower than the year’s start.
According to the weekly report of the Riyadh-based Bakheet Financial Advisors (BFA), the market was reacting to the mixed performance of the blue chip firms.
Saudi Basic Industries Corp. (SABIC), with 26 percent of the market’s capitalization, announced a 45 percent increase to SR12.8 billion for the first half of 2007. This compares with SR8.8 billion in the same period last year and SR9.8 billion for the same period in 2005.
SABIC’s shares gained 2.59 percent to SR128.50 last week despite Standard & Poor’s Ratings Services said that the upgrade of the foreign and local currency rating to “AA-” from “A+” on Saudi Arabia will not change the ratings on SABIC; A+/Stable/A-1 nor the one-notch extraordinary support given for its Government Related Entity (GRE) status.
However, the Saudi Telecom Co. (STC), the market’s second largest firm, reported drop in its midyear profits. Its shares, however, rose 3.29 percent to SR63.25.
Shares in Etihad Etisalat edged higher by 8.92 percent to SR58 as it announced 162 percent increase in second quarter profit.
The BFA expected the market to respond positively to the good profits in general as recorded by listed firms.
Shares in Saudi Printing & Packaging Co. (SPPC), which made debut on the Tadawul on Sunday, surged 102.27 percent in a week to SR44.50.
The newly listed Saudi United Cooperative Insurance Co. (Walaa Insurance) was the top gainer as its shares jumped 360 percent to SR46.
Shares in Sahara Petrochemical plunged 19.86 percent last week to SR28.25.
The stock market turnover also rose slightly to SR42.76 billion from SR40.49 billion in the previous week.
SPPC was most active by value as SR3.14 billion worth of shares changed hands last week.
Arab stock markets are expected to remain vigilant in the coming weeks as investors have digested the midyear corporate results and rebuild their positions, financial analysts said yesterday.
They expected speculation and short-term transactions to dominate regional markets and prices to move sideways, as investors search for new clues and moving factors.
“I believe speculation and short-breath tactics will be the dominant factors in the coming six weeks after investors comprehended the semi-annual results of listed firms and rebuilt their positions accordingly,” Amman-based analyst Wajdi Makhamreh told Arab News.
“I think regional stock markets still lack the degree of confidence they enjoyed two years ago, possibly due to the negative impact of geopolitics and the fact that traders prefer short-term commitments,” he said.
However, Makhamreh pointed out that the soaring oil prices and the subsequent huge surplus petrodollars due to accrue to the Gulf countries “will continue to render support to stock markets”.
Jordanian stocks continued to suffer as a result of a liquidity shortage that was squeezed further by the launching of new firms and offering their shares for public subscription.
The all-share price index of the Amman Stock Exchange lost 1.07 percent last week, closing on Thursday at 5,718 points compared with previous week’s close at 5,780 points, according to the ASE weekly report. Kuwait’s KSE all-share price index gained 0.4 percent last week, closing at 12,411 points from 12,361 points in the previous week.
The unified all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi retreated 2.7 percent, closing at 4,519 points from 4,644 points last week.
Analysts attributed the decline mainly to the lower-than-expected profits of listed firms in the first six months of the year.
The Emaar real estate conglomerate announced a 7 percent increase in its semi-annual profits to $893 million.
Egypt’s CASE 30 index, measuring the performance of the 30 most active firms, gained 1.5 percent last week, closing at 8,469.5 points compared with previous week’s close at 8,345.7 points.
The GulfBase GCC Index declined 0.75 percent last week to 5,381.19 points. The value of GCC traded shares also fell 3.95 percent to $16.63 billion and volume dropped 2.28 percent to 5.46 billion shares.