JEDDAH: The Saudi stock market continued its downward trend yesterday after suffering its biggest one-day fall in six months on Saturday. The Tadawul All-Share Index (TASI) dropped 1.71 percent or 137.52 points. The index declined 5.41 percent on Saturday.
The stock market turnover also fell to SR5 billion yesterday compared to over SR6 billion on Saturday.
Saudi Basic Industries Corp. (SABIC) shares closed yesterday down at SR108.
Meanwhile, the board of Rabigh Refining and Petrochemical Co. (Petro Rabigh) approved a number of decisions relating to the progress of the construction of the company’s facilities and its on-going operations on Saturday. The board agreed to transfer ownership of the current Saudi Aramco refinery at Rabigh to Petro Rabigh with book value of SR862.5 million and for the company to assume its full operation and maintenance from Oct. 1. The board was also apprised of the company’s readiness to start-up the operation of its new refining and petrochemical plants. The board also said the construction progress for Petro Rabigh has reached 97.6 percent at the end of August, and some of the new facilities are already in operation such as the utilities and power. Other facilities such as the Ethane and Butane pipelines are ready to receive the feedstock to be supplied by Saudi Aramco, while other facilities are progressing for completion and being prepared for start-up.
The board also discussed some of the technical issues that may lead to the rescheduling of the start-up of some units to the first quarter of 2009 and an additional cost of SR1.125 billion, which represents 3 percent of the total project cost. Petro Rabigh shares were trading at SR48.75. The Kuwait-based Global Investment House (Global) has recommended “buy” on STC stock.
At the current market price average of SR64, STC trades at 8.9x and 8.2x its earnings and 3.4x and 3.2x its book value for 2008 and 2009 respectively. Global’s Discounted Cash Flow (DCF) valuation estimates the fair value of STC’s stock at SR78.75, which is 21.6 percent higher than the current market price of the stock. The STC stock closed yesterday at SR63.50.
Negative trend
The BMG Saudi Index maintained its negative trend yesterday. The index fell 1.0 percent to reach a closing level of 423.07 points. The total market turnover also descended by 24 percent to SR2.4 billion ($632 million) versus the SR3.1 billion ($835 million) registered in Saturday’s session.
All the sectors witnessed losses for the second successive trading session. The worst performer was the insurance sector, falling by 2.2 percent.
Only five shares went up, while 23 depreciated, with only two shares standing still. Jabal Omar Development Company was the session’s best performer, ascending by 2.4 percent to SR21.50. The worst performer was The National Shipping Company of Saudi Arabia, plunging by 6.0 percent to SR19.75.