RIYADH/LONDON, 19 August 2003 — Saudi shares made history yesterday by cruising past the 4,000-point mark for the first time ever as investor confidence continued to build up amid highly favorable conditions, traders said. The Tadawul All-Shares Index (TASI) gained 0.85 percent to close the day at 4,011.34 points, a new record. The previous high of 3,977.40 points was reached on Sunday.
The TASI is 59.3 percent higher than at the start of 2003. The increase was made mainly on the back of a surge in the prices of Saudi Electricity Co. (SEC), the third largest firm in terms of capitalization. A number of smaller companies also increased.
The Saudi bourse has been steadily rising since March due to strong oil prices which greatly boosted public revenues, and abundant cash flow, which combined to boost investor confidence.
The main driving forces have been market leader Saudi Telecom, Saudi Basic Industries Corp (SABIC), the second largest, SEC and the nine listed banks. Together with the listed commercial banks, the three companies make up more than 80 percent of the market’s value. SEC yesterday gained 6.5 percent, while Saudi Telecom increased just 0.13 percent and SABIC lost 0.4 percent. But since the start of the year, Saudi Telecom has gained 127.5 percent, SEC 114.8 percent, and SABIC just under 99 percent. Saudi stocks ended the first six months of 2003 up 43.5 percent.
In London, the dollar strengthened further against major currencies yesterday as markets stood by their overall faith in the US economic recovery in the absence of any fresh indicators. The euro fell to 1.1139 dollars from 1.1262 late on Friday in New York. The dollar traded at 119.43 yen from 119.14 on Friday.
After falling through the 1.12-dollar level, the euro continued to hover at a two-week low following a firm opening on Wall Street.
The euro rose to as high as 1.1328 dollars overnight Thursday in the wake of North America’s worst power outage. “The dollar has strengthened against both the euro and the yen as optimism over the US economy continues to buoy the dollar,” said Bank of Tokyo-Mitsubishi analyst Derek Halpenny.
US stocks surged to their highest levels in over a year in early-afternoon trading in New York yesterday, lifted by a combination of robust earnings reports and growing confidence about the US economic recovery. Unfazed by recent power strikes and largely ignoring reports about sabotaged oil pipelines and water mains in Iraq, the Dow rose to its highest level in 13 months as investors pushed up demand for retail stocks.
The Dow Jones industrials were up 93.77 points, or 1.01 percent, at 9,415.46 at 1609 GMT while the technology-laden NASDAQ was up 27.20 points, or 1.60 percent, at 1,729.21. The broader Standard and Poor’s 500 index was up 8.44 points, or 0.85 percent, at 999.11.
Gold fell in Europe yesterday as a resurgent dollar saw some investors get out of the metal, with optimism about the world’s biggest economy being on t he mend dulling bullion’s safe-haven sparkle. After trading quietly on Friday, with a reduced New York NYMEX session due to the biggest power outage in North American history, bullion slid sharply as the dollar clambered to its highest level in over two weeks against the euro after last week’s better-than-expected US economic data.
Asian stock markets rose yesterday amid growing confidence about the global economy. Tokyo led the region higher with share prices jumping 1.72 percent to close above 10,000 points for the first time in almost a year.
The Tokyo Stock Exchange’s Nikkei-225 average gained 169.50 points to end the day at 10,032.97 — the first close above the symbolic level since Aug. 26, 2002. On that day, the headline index finished at 10,067.74 points.
