RIYADH, 10 December 2004 — Saudi Shares fell sharply in the week to Thursday, dropping 5.7 percent after a slip in world oil prices.
The all-share index of the largest Arab bourse settled at 7,693.97 points yesterday, down from 8,158.82 points last week.
“It’s a correction. Last week the index was up nearly 90 percent on the year to date,” said a banker in Saudi Arabia. “Obviously oil has also dropped quite significantly from the high short-term levels.”
Share prices in Saudi Arabia, the world’s largest crude exporter, have risen in step with higher oil prices.
Turnover fell to SR40.10 billion ($10.70 billion) from SR45.9 billion last week. Sixty-six shares fell and six rose.
Bakheet Financial Advisors said the market had been pushed down by “selling pressure by investors accumulating liquidity for the upcoming IPO of National Company for Cooperative Insurance”. The government will offer 7 million shares in state-owned NCCI from Dec. 21. Petrochemicals giant Saudi Basic Industries (SABIC) - the Kingdom’s biggest listed firm in terms of market capitalization - closed down 9.1 percent.
Bakheet Financial Advisors expected the market to bounce back next week as investors digested news of Saudi Arabia’s 2004 budget surplus of SR98 billion.
