Stocks Dive as Investors Gear Up for Zain IPO

JEDDAH, 7 February 2008 — The Saudi stock market took a tumble yesterday as investors are preparing for a SR7 billion initial public offering of Zain, Saudi Arabia’s third mobile operator, which begins on Saturday. The IPO consists of 700 million shares with a par value of SR10.

The Tadawul All-Share Index (TASI) plunged 291.06 points or 2.98 percent to close at 9,484.41 yesterday. Global stocks also suffered fresh carnage yesterday as growing fears of a US recession swept across markets.

Out of 111 stocks traded, only four companies were in positive territory while 106 companies were in the red. Shares of Saudi IAIC Cooperative Insurance Co. gained by 9.73 percent to SR166.25, Ahmed H. Fitaihi Company by 3.47 percent to 37.25, Qassim Cement 0.58 percent to SR171.50 and National Agriculture Development Co. by 0.49 percent to SR50.75.

Shares of chemical companies suffered badly yesterday. Saudi Kayan Petrochemical Co. shares dropped by 9.61 percent to 23.50, Rabigh Refining and Petrochemical Co. (Petro Rabigh) by 7.94 percent to SR49.25 and Yanbu National Petrochemical Co. (YANSAB) by 7.51 percent to SR49.25.

Shares of Saudi Basic Industries Corp. (SABIC) fell 1.66 percent to SR162.75 yesterday. Sahara Petrochemical Company’s shares declined 9.83 percent to SR41.25.

In the banking sector, shares of Banque Saudi Fransi fell by 4.36 percent, Samba Financial Group by 3.07 percent and Al-Rajhi Bank by 2.21 percent.

Etihad Etisalat (Mobily) shares dropped by 5.15 percent to SR69 yesterday. Mobily Chief Executive Khaled Al-Kaf announced on Tuesday that the company’s founding shareholders will offer to sell 20 percent of their shares to local and foreign investors. Saudi Telecom Co. (STC) shares also fell 4.20 percent to SR74 yesterday.

The stock market turnover was over SR14 billion yesterday.

The Capital Market Authority (CMA) announced yesterday that the listing and trading of Al-Sagr Company for Cooperative Insurance would begin on Feb. 10, within the insurance sector with an unrestricted price limit for the first day of trading only.