JEDDAH: The Saudi stock market took a tumble as big losses were seen in all sectors yesterday. The Tadawul All-Share Index (TASI) plunged 205.31 points or 4.19 percent to close at 4,688.89. The index made a 1.99 percent gain on Saturday, the first day of trading this week, but later it fell by 0.97 percent on Sunday and 0.04 percent on Monday. The TASI is still down 2.38 percent so far this year.
The insurance sector was badly affected yesterday as its index plummeted 8.41 percent, followed by petrochemical industries index, which was down 7.89 percent.
“As the market lacks local news that can ease market players’ and investors’ fears, we will continue to be effected by global financial markets, especially the US market which is currently facing a stimulus plan concern,” The Jeddah-based Financial Transaction House (FTH) said in its daily stock market commentary yesterday.
Out of 125 companies traded, the only gainers yesterday were Saudi Research and Marketing Group (SRMG) and Saudi Pharmaceutical Industries and Medical Appliances Corp.
The banking index was down 2.11 percent yesterday. The Saudi Investment Bank shares dropped by 4.57 percent, Alinma Bank by 3.03 percent, Al-Rajhi Bank by 3.12 percent, Arab National Bank by 2.73 percent and Samba Financial group by 1.92 percent.
The impact of the global economic crisis on the Kingdom’s financial sector will not affect the banks and their liquidity or ability to achieve profit, Saudi Arabian Monetary Agency (SAMA) Gov. Muhammad Al-Jasser, said.
Al-Jasser said in an interview with CNBC Arabiya yesterday that the Kingdom’s banking sector is unaffected because the vast majority of its investments and transactions are internal. As a result, Saudi banks’ dealings hinge upon local rather than external factors.
In the insurance sector, shares in Saudi IAIC Cooperative Insurance Co. and Sanad Insurance & Reinsurance Cooperative Co. declined 10 percent each, while all other shares were also in the red.
The stock market turnover was over SR.4.90 billion yesterday.
The Saudi Stock Exchange announced yesterday that BMG Financial Group has become a duly licensed, approved and authorized member firm of Tadawul, with the right to conduct brokerage services and deal as principal and agent in the market.
Meanwhile, Deutsche Bank announced recently that it has commenced its research coverage of companies listed on the Tadawul.
Direct foreign ownership in Saudi stocks is not open to foreigners domiciled outside of the Kingdom, but in 2008, Deutsche Bank was among the first foreign financial institutions to receive the authorization of the Capital Market Authority (CMA), the capital market regulator in the Kingdom, to trade on behalf of foreign investors in Saudi stocks through swap agreements.
Deutsche Bank opened its Riyadh branch in 2006 and established Deutsche Securities Saudi Arabia in 2007.
Sharp decline
The BMG Saudi Index, which comprises the top 30 active companies in Saudi Arabia based on their market capitalization after removing government ownership, recorded a sharp decline in yesterday’s trading session. The index dropped by 5.8 percent to 224.94 points. The total turnover, however, appreciated by 36.4 percent to SR2.7 billion compared to Monday’s session’s turnover of SR2 billion, whereas the total number of shares traded increased by 30.2 percent to 157.2 million shares versus 121.8 million shares in the previous session.