RIYADH, 4 June 2004 — Saudi stocks soared 10.6 percent in the week to yesterday, bouncing back from a sharp fall the previous week as optimism over strong oil prices and healthy company earnings outweighed concerns over security.
The rally, the market’s highest ever weekly surge, was led by heavyweight Saudi Electricity Co., which recovered 36.3 percent after plunging 37 percent last week.
The utility, the most active share with 19.1 percent of total turnover, closed at SR138, still below its close of SR161 on May 20.
The index closed at 5,657.98 points, up from 5,114.05 a week ago. It had tumbled 15.2 percent in the previous week, a fall attributed by traders to a correction after big gains. The Arab world’s biggest exchange is up 27.5 percent this year.
Strong oil revenues have been a boon for the economy of the world’s biggest crude exporter, increasing corporate earnings and share liquidity. All but one of the bourse’s 71 shares rose in the week, which saw turnover rise to SR45.3 billion ($12.1 billion) from 29.9 billion in the previous week.
Bahkeet Financial Advisors (BFA) said the rally reflected “investor rejection of terror.” “BFA expect blue chips stocks with fair investment valuation ... to keep the market steady while speculative (small cap) stocks continue being volatile,” it said in a weekly report. Saudi Telecom climbed 7.1 percent to SR525, while industrial giant Saudi Basic Industries Corp. closed 5.7 percent higher at SR446.50.
Meanwhile, Beirut’s market ran a close second in trading across the Middle East, climbing 10.3 percent, while other bourses showed mixed performances.
In Beirut, the BSI index closed up 10.3 percent at 599.06 points, with banking sources attributing the advance to investor confidence inspired by OPEC holding its extraordinary meeting there yesterday.
In Kuwait, the region’s second-largest market after Saudi Arabia, the KSE index picked up 1.5 percent to end the week at 5,316.20 points. Analysts said the bourse advanced on the back of strong oil prices and on optimism over prospects for neighboring Iraq after the appointment of a new interim government there. The NBAD index in the United Arab Emirates added 1.7 percent to close at 5,O89.7 points.
The Palestinian Al-Quds index edged up 0.9 percent to 175.98. In Tehran, the TSE index gained 0.3 percent to 11,602.7 points, while Cairo’s HFI ended unchanged at 14,518.41. Oman’s MSM edged up 0.1 percent to 3,214.34 points, Qatar’s CBQ fell 1.9 percent to 979.95, Bahrain’s BSN lost one percent to 2,465.92 and Jordan’s ASE shed 0.6 percent to 2,710.1.
