JEDDAH: The Saudi stock market dropped sharply yesterday as investors were awaiting the annual results of the leading listed companies. The Saudi firms are expected to report slowdown in profits because of the global financial crisis. The Tadawul All-Share Index (TASI) plunged 161.57 points or 3.04 percent to close at 5,160.65 points. Out of 125 stocks traded, shares in 24 companies surged, while 94 companies were in the red. Over SR5.81 billion worth of shares changed hands yesterday compared to SR34.74 billion for whole last week.

The Saudi stock market began 2009 with a bang after falling over 56 percent last year. The index gained 10.81 percent last week.

The petrochemical industries sector suffered badly as shares of all companies declined yesterday. The petrochemical index plunged 5.23 percent to 3,512.52 points. The bellwether Saudi Basic Industries Corp. (SABIC) lost 3.84 percent to close at SR56.25, after trading as low as SR54.75.

National Industrialization Co. shares fell by 7.71 percent to SR14.95, Saudi Arabia Fertilizer Co. (SAFCO) by 6.43 percent to SR94.50, Sahara Petrochemical Co. by 8.38 percent to SR13.65, Yanbu National Petrochemical Co. by 6.21 percent to SR16.60 and Rabigh Refining and Petrochemical Co. by 5.95 percent to SR18.15.

In the banks and financial services, buoyant profit report pushed Alinma Bank shares higher by 3.41 percent to SR12.10, while Saudi Hollandi Bank shares remained unchanged yesterday. Shares of all other companies fell. Al-Rajhi Bank shares declined by 4.33 percent, Banque Saudi Fransi by 4.56 percent and Samba Financial Group by 4.12 percent.

Analyst Thamir Al-Saeed said the situation of the Kingdom’s banking sector was extremely good. “The announcement of Bank AlJazira to distribute cash dividends by five percent of the capital reflects the bank’s financial strength,” he said, adding that profits of Bank AlJazira for the first nine months of 2008 had fallen considerably. The bank posted a net profit of SR314 million during the period.

Saudi banking sector with its relatively limited exposure to the global financial markets was somewhat able to escape the severe implications of the global financial distress. However, being an important part of the intertwined global markets, some dampening effects were translated into the Kingdom’s banking sector performance, the Kuwait-based Global Investment House (Global) said in its commentary recently. Saudi banks constitute 32 percent of Tadawul market capitalization. Overall, the sector has loan to deposit ratio of more than 80 percent.

The listed Saudi banks recorded year on year rise of 1.6 percent in net profits, posting a consolidated net profit of SR19.3 billion in first nine months of 2008. Al-Rajhi Bank, the largest bank in terms of market cap, recorded rise of 4.7 percent; while other banks like Samba and Riyad Bank declined by 6.3 percent and 4.8 percent, respectively. According to Global estimates, the 2008 overall banking sector results will not experience any significant growth as the banking firms’ performance could be mixed. Amongst the listed big banks, Al-Rajhi Bank and SABB (Saudi British Bank) will lead the growth, while Riyad Bank and Samba could witness a decline.

BMG index down

The BMG Saudi Index, which comprises the top 30 active companies in Saudi Arabia based on their market capitalization after removing government ownership, could not maintain its uptrend that extended during the last five trading sessions. The 30-share index dropped by 3.1 percent in yesterday’s session, losing 8.32 points to close at 256.87 points.

The total turnover also depreciated by 18.9 percent to SR3.7 billion compared to Wednesday’s session turnover of SR4.5 billion.

The total number of shares traded also fell by 5.9 percent to 229.3 million shares versus 243.7 million shares in the previous session.