JEDDAH, 3 November 2007 — The rising oil prices and increase in trading volume helped the Saudi stock market to continue its upward march for the 2nd week in a row last week.
According to the Riyadh-based Bakheet Investment Group (BIG), the positive third quarter corporate results announced by major listed companies were also the main force in extending market gains.
The Tadawul All-Share Index (TASI) gained 5.02 percent last week to 8,621.45 compared to 8,209.23 points closing in the previous week. So far the TASI is 8.67 percent higher than the year’s start.
Economic analyst Abdullah Katib said the reaching of index at 8,620 points reflected the market’s strong trend to make upward move banking on the good results of leading companies such as Saudi Basic Industries Corp. (SABIC).
The BIG said in its weekly report that SABIC shares reached highest price for 14 months. SABIC shares increased by 6.45 percent last week to close at SR148.50.
Shares of Al-Rajhi Bank also surged by 8.62 percent to SR94.50.
The BIG said investors are leaning toward blue chips amid their positive financial records, coupled with their reluctance of small stocks that are highly speculative.
The Saudi Capital Market Authority (CMA) announced last week its plans to reform the market sectors into 14 sectors and indices. The indices will be calculated based on “Free Float” stocks, which result in a more accurate measurement of the market performance. The current calculation of indices include the value of nontradable stocks (i.e. the government stake and others), which hold more than 45 percent of total market cap.
“The Saudi stock market to be rather stable after the CMA announcement on the reform of the sectors and indices, giving investors enough time to assimilate the new market structure, allowing them to reallocate their portfolios based on sound investment sense. Speculative stocks will continue decreasing amid their exaggerated PE ratio,” the BIG said.
US oil prices soared to an all-time high of $96.24 before falling to $93.49 a barrel on Wednesday. The stock market volume was 256,491,130 on Oct. 27, the first day of trading last week, and it was 262,767,270 on Wednesday.
Saudi Kayan Petrochemical Co. shares jumped by 12.96 percent to SR15.25, Saudi Arabia Refineries Co. by 12.56 percent to SR239.75, Saudi Industrial Investment Group by 12 percent to SR49, Saudi International Petrochemical Co. by 11.88 percent to SR44.75 and The National Company for Glass Industries by 11.01 percent to SR63.
Shares of some insurance companies suffered badly last week. Malath Cooperative Insurance and Reinsurance Co. shares dropped by 12.67 percent to SR129.25, SABB Takaful by 9.89 percent to SR125.25 and Al-Ahli Takaful Co. by 5.23 percent to SR163. Stock market trading value reached SR44 billion last week as compared to SR32.1 billion in the previous week.
SABIC was most active by value as shares worth SR3.16 billion changed hands last week.
The GulfBase GCC Index also edged higher by 3.88 percent last week to 6,190.51 points. The value of GCC traded shares surged 28.87 percent to $26.05 billion and volume increased 27.71 percent to 12.69 billion shares.