Insurance stocks in KSA plunge 6.65%

Insurance stocks at Tadawul continued to plunge for the second day yesterday since the Capital Market Authority (CMA) announced plans to cut down on speculative trading through tighter rules.
“It would be unfortunate if insurance stocks become casualties of the push against speculation,” commented Asim Bukhtiar, head of research at Riyad Capital.
“Overall trading activity would be negatively impacted and some insurance companies may lose access to equity markets for financing,” he told Arab News.
The insurance index suffered 6.65 percent loss to close at 1,167.78 yesterday.
“The sector has generally been associated with very high volatility, often linked to short-term opportunistic buying and selling. The new rules can hence be expected to have more of an impact, which has likely affected the mood,” Jarmo T. Kotilaine, a regional analyst, said.
John Sfakianakis, chief investment strategist at Masic in Saudi Arabia, said: “The insurance sector is known to be highly speculative and there seems to be a selling off as a reaction to the new CMA rules which are geared to contain speculation.”