JEDDAH: The Saudi stock market fluctuated in volatile trading yesterday. The Tadawul All-Share Index (TASI) opened at 6,019.69 points and reached as high as 6,078.56 and low of 5,935.45 before closing at 6,025.71 points. The fresh gain yesterday helped the TASI reach a fresh 26-week high.

A session that was characterized by a struggle between bulls and bears as the index moved in a range of -84 and +59, due mainly to SABIC’s (Saudi Basic Industries Corp.’s) big range of 8.5 points high to low, the Jeddah-based Financial Transaction House (FTH) said in its daily commentary yesterday.

SABIC shares closed 3.43 percent higher at SR67.75 yesterday.

“Liquidity was quite strong, coming in at SR11 billion, a level we have not seen since July 28 of last year,” Faisal Alsayrafi, managing director and CEO of FTH, said.

The FTH report also said sector activity was not as strong yesterday, with only 5 sectors closing with gains ranging from 0.02 percent in Retail to 2.79 percent for the Insurance sector. Sector losses on the other hand ranged from 0.06 percent in Multi-Investment to 1.82 percent in Transport.

Overall market breadth was also negative, with 49 advancers and 70 decliners giving an AD ratio of 0.70.

Focusing on Tadawul’s movement, Alsayrafi said “We continue to maintain a bullish view with high level of caution for the short-term, as we continue to monitor any close below the 5 days exponential moving average of 5,888 as per today’s (Sunday’s) close.”

Meanwhile, Morgan Stanley has recommended investors to begin increasing their exposure to Middle Eastern stocks as valuations are more attractive now than at any time in the past two years.

Since advising investors to reduce their exposure to the region in October 2008, the region has underperformed other emerging markets and Morgan Stanley’s latest report “MSCI Arabian Markets: Economically Resilient and Valuations Appealing Again-Start Increasing Exposure,” which was released yesterday, suggests that the timing is now right to begin increasing exposure in regional equity markets, highlighting Saudi Arabia as a particularly attractive market for investors along with Qatar and Egypt.

“Saudi Arabia is in one of the strongest positions to weather the global crisis due to the fact it possesses one of the largest pools of FX savings and accumulated fiscal surpluses in the world, a sound banking system and minimal real estate exposure.

The prospect for further liberalization of equity markets in the country to foreign investors provides an additional incentive to increase positions,” Morgan Stanley said in its report.