JEDDAH/AMMAN: Saudi shares, which gained about 32 percent in five successive weeks, lost some ground last week, mainly due to unprecedented losses incurred by Saudi Basic Industries Corp. (SABIC), the Arab world’s largest conglomerate.
The Tadawul All-Share Index (TASI) shed 3 percent last week, closing at 5,216.84 points. However, TASI is currently 8.6 percent higher than the year’s start.
“TASI was affected by the sharp decline of global markets on Monday in addition to the negative results of SABIC,” the Riyadh-based Bakheet Investment Group (BIG) said in its weekly report.
The BIG expected the Saudi stock exchange to be “rather steady with investors re-evaluating their positions in response to the negative financial results announced by listed firms in the first quarter, particularly SABIC.”
“However, investors are likely to be cautious over the significant gains by speculative stocks in the absence of positive fundamentals for those stocks,” the BIG said.
“Following a strong correction during the week, and especially following SABIC’s disappointing earning’s report, the market did manage to minimize losses for the week on the last day of trading, the Jeddah-based Financial Transaction House (FTH) said. The Saudi index closed 160.91 points or 3.18 percent higher at 5,216.84 on Wednesday.
“After two closes below the 5 days moving average, the market is expected to maintain it’s position above it before determining whether the profit-taking period is over, or simply gathering momentum,” the FTH said in its market report.
The stock market turnover was over SR34 billion with SABIC the most active in value, as SR4.69 billion worth of shares changed hands last week. SABIC shares closed last week at SR42.90, down 11 percent.
Sanad Insurance & Reinsurance Cooperative Co. was the top gainer last week as its shares closed 31.83 percent higher at SR38.10, while SABB Takaful was the top loser as its shares dropped 14.91 percent to SR97.
Arab stock markets reflected mixed performance last week as investors remained under psychological pressures from global markets and the impact of first quarter results, financial analysts said yesterday.
“Regional markets are relatively stable, but investors are still responsive to what takes place on the Wall Street and other global bourses,” Nizar Taher, head of brokerage at the Jordan Ahli Bank, told Arab News.
“I believe we are on crossroads: With investors still coming under psychological pressures from world markets and at the same time focusing attention on first quarter results,” he said.
Taher pointed out that Arab bourses were dominated by a wave of speculation in small caps with investors trying to avoid commitment to long-term positions to evade losses.
Jordanian shares were volatile last week with small caps gaining at the expense of blue chip stocks.
“A group of speculators, particularly Iraqi residents, are teaming up to boost certain stocks which lack support in terms of fundamental factors,” Taher said.
The all-share price index of the Amman Stock Exchange gained 1.04 percent last week, closing at 2,793 points, according to the ASE weekly report.
Kuwait’s KSE all-share price index closed week almost unchanged at 7,419 points.
The United Arab Emirates shares were the scene of strong volatility last week as traders came under pressure from developments on world markets, analysts said.
The benchmark prices of the UAE stock exchanges of Dubai and Abu Dhabi declined 3.5 percent and 4.3 percent last week to close at 1,653 points and 2,565 points respectively.
— With input from Abdul Jalil Mustafa