JEDDAH/AMMAN: Saudi shares were volatile last week, but the downward trend dominated the Arab world’s largest stock market.
The Tadawul All-Share Index (TASI) plummeted 10.11 percent or 622.98 points last week, closing at 5,537.82 points. It was the first time the benchmark broke below the 6,000-point barrier since June 2004. TASI is currently 49.83 percent lower than the year’s start.
The weekly report of the Riyadh-based Bakheet Investment Group (BIG) expected confidence “to build up” in the coming few weeks due to subsiding fears over the world financial crisis and assurances about the strength of the Saudi economy.
Investors are expected to benefit from exceptionally low price of stocks and “gradually recoup part of the losses which accumulated during the year”, the BIG said.
The Saudi Arabian Monetary Agency (SAMA) lowered its benchmark repurchase rate to 4 percent on Thursday to boost confidence in the economy.
SABB (The Saudi British bank) was the top gainer last week as its shares jumped 6.25 percent to SR68. Banque Saudi Fransi’s shares also surged 5.16 percent to SR56. Arabian Pipes Co. was the main loser last week as its shares plunged 29.71 percent to SR48.50.
The stock market turnover was over SR29.86 billion last week. Saudi Basic Industries Corp. (SABIC) was most active by value as shares worth SR4.99 billion changed hands last week. SABIC shares closed 13.15 percent down at SR71.
Most Arab stock markets rebounded in the last two days of the week curtailing losses they incurred earlier, but analysts said yesterday regional bourses would remain “cautious” pending developments on world markets after the US Fed’s decision to slash interest rates by 50 basis points.
“I believe Arab stock markets will continue to assume vigilance because investors are still lacking in appetite for risk and alert to what takes place on leading world markets,” Wajdi Makhamreh, chief operating officer of the Amman-based Sanabel International Holding, said.
“Steps taken by financial authorities, including interest rate cuts by central banks and the pumping of liquidity into the banking systems, will help shore up confidence, but investors still keep an eye on what is going on at the Wall Street and elsewhere,” he said.
Makhamreh expected regional markets to witness profit-taking moves at times and speculators to stick to a “hit-and-run strategy” as a negative psychological sentiment, albeit unjustifiable, continues to grip Middle East bourses.
Jordanian shares also rebounded last week. The all-share index of the Amman Stock Exchange shed 2.46 percent last week, closing at 3,172 points, according to the ASE weekly report.
Kuwaiti stocks rebounded on Thursday for the first time in 10 days, apparently after the National Assembly passed a legislation guaranteeing all deposits at commercial banks without any ceiling. The KSE all-share price index plunged 7.7 percent last week, closing at 9,676 points.
The United Arab Emirates stocks fluctuated violently during the week. The stock exchange of Dubai gained 0.85 percent closing week on Thursday at 2,942 points while the stock exchange of Abu Dhabi closed 0.73 percent in the red at 3,326 points.
The GulfBase GCC Index closed 7.99 percent lower at 4,125.35. The value of GCC traded shares also dropped 11.21 percent to $12.49 billion and volume fell 2.38 percent to 5 billion of shares.
— With input from Abdul Jalil Mustafa