AMMAN, 8 January 2005 — Arab stock markets greeted the new year with an upbeat mood that is expected to express itself in a clearer manner in the coming few weeks with the publication of the 2004 balance sheets of listed firms and a possible improvement in the political situations in Iraq and the Palestinian territories, analysts said yesterday.
“We are witnessing strong markets that are set to gather momentum as we plunge further into the new year and become nearer to the distribution of dividends,” Amer Muasher, head of brokerage at the Jordan National Bank, told Arab News.
“The bad security conditions in Iraq are discounted in the market, but any improvement the political scene there as a result of the Jan. 30 poll will certainly reflect positively on regional stocks,” he said.
Muasher attributed the surge in both prices and volumes at the Amman Stock Exchange (ASE) this week to “optimism over 2004 profits, the existence of local and foreign capital seeking investment in Jordan and an expected breakthrough in Iraq and Palestine”, where presidential election is scheduled for tomorrow.
“The excellent ASE performance this week indicates that what is taking place is real trading rather than speculation,” he said.
The ASE index climbed more than 8 percent this week to close on Thursday at an all-time high of 4,559 points.
The banking sector dominated trading over the last two days of the week reflecting investors’ expectations that Jordanian banks headed to the distribution of unprecedented dividends, a portfolio manager said.
Saudi shares edged lower this week affected by the retreat of the market’s two largest stocks, the Saudi Basic Industries Corp. (SABIC) and the Saudi Telecom Co. (STC), which both account for 41 percent of the total market cap, according to the weekly report of the Bakheet Financial Advisers (BFA).
The Tadawul all shares index of the largest Arab bourse lost 0.8 percent, closing on Thursday at 8,142 points, the BFA report said.
“The limited slippage occurred as investors awaited the release of the Q4 2004 financial results of listed firms, particularly blue chips,” it added.
The BFA predicted the market “to move in a narrow volatile band while investors eyed the annual 2004 corporate financial results, which are expected to be announced in the next few weeks”.
However, the report advised investors to be “cautious of any volatile moves in oil prices”, due to the impact such fluctuations will have on stocks in Saudi Arabia, the world’s largest crude exporter.
In Kuwait, the KSE all-share price index gained 0.8 percent this week, closing at 6,463 points, up from 6,409 points last week.
“A wave of profit taking and speculation on blue chip shares prevented the index from rising further,” an Amman-based analyst said. “However, we expect Kuwaiti shares to show better performance in the coming weeks with the gradual release of balance sheets for the fourth quarter of 2004,” he added.
Egyptian stocks also recorded a robust showing in the first week of 2005, with the Hermes all-share price index climbing 6.3 percent.
The Egyptian bourse’s benchmark price closed week at 25,397 points, up from 23,893 points in the last week of 2004.
