In January, the Tadawul All-Share Index (TASI) closed at 6,626.04 points, gained 208.31 points or 3.25 percent over the close of December 2011. The index surged 4.22 percent compared to the same period of the previous year (end of January 2011), according to Tadawul’s monthly report for January released on its website on Wednesday.

The highest close level for the TASI index during the month was at 6,626.04 points as on Jan. 31.

The Tadawul report said total equity market capitalization at the end of January reached SR1.30 trillion ($347.52 billion), increased by 2.55 percent over the previous month (end of December 2011).

The total market capitalization at the end of 2011 was SR1.27 trillion ($338.89 billion), decreasing by 4.12 percent as compared to the end of 2010.

The total value of shares traded for the month of January reached SR155.40 billion ($41.44 billion), rising by 31.25 percent over the previous month.

Commenting on Tadawul surge in January, Paul Gamble, head of research at Jadwa Investment, said: “The TASI maintained its upward trend during January and closed on Wednesday at an eight-month high. It was buoyed by strength in global markets, though it underperformed many owing to some disappointment with fourth quarter results and heightening regional political tensions.”

He said turnover was at its highest for over two years. “There is still a speculative element to some trading, but it appears that investors have become more comfortable with the prospects for the companies listed on the market,” Gamble said.

The Tadawul index closed Wednesday at 6,663.48 points.

The total number of shares traded reached 7.49 billion for the month of January compared to 5.20 billion shares traded during the previous month, increasing by 43.96 percent, the report said.

The total number of transactions executed during January reached 3.55 million compared to 2.87 million trades for the month of December 2011, increasing by 23.82 percent.

Jarmo T. Kotilaine, chief economist at the National Commercial Bank, told Arab News: “The Tadawul data are clearly very encouraging as they suggest that the normalization in market conditions that began toward the end of last year is continuing to gather pace. After a highly volatile year, the market has now returned to positive territory supported, even more encouragingly, by a pronounced pick-up in market volumes. This development is likely to a significant degree encouraged by increased optimism about the economy after a landmark in terms of GDP growth. “

He said this growing confidence is also reflected in a fairly consistent increase in bank credit. All considered, these trends suggest that an unusually persistent sense of malaise that depressed market performance last year is finally being shaken off.