JEDDAH, 14 May 2005 — Saudi shares bounced back last week, gaining 4.9 percent to erase previous week’s fall and edge closer to April’s record highs.
The Tadawul All-Share Index (TASI) closed at 11,816.37 points, just a couple of percent below the record 12,053 points of a month ago.
However, the index was down 54.48 points or 0.46 percent on Thursday, the last day of trading. Out of 74 companies traded, the market saw share prices of 36 companies going up while those of 36 others going down.
In all some 25.2 million shares worth SR6.4 billion changed hands in 89,800 deals.
Saudi stocks surged strongly last week on gains of the market’s two biggest stocks — the Saudi Basic Industries Corp. (SABIC), which announced plans last week to invest $8 billion in petrochemical projects in the next three years, and the Saudi Telecom Company (STC) — as well as higher oil prices registered on the world market, according to the weekly report of the Riyadh-based Bakheet Financial Advisors (BFA).
BFA attributed STC’s gains to optimism about the company’s second-quarter results, pinned on the fact that new rival Etihad Etisalat (Mobily) has yet to set up its mobile service in the Kingdom.
The BFA predicted that the Saudi stock market would be “quiet this week as long as the current level of oil prices remains stable around $50 per barrel”.
Cement stocks were the biggest gainers, rising more than 8 percent in a week which saw daily reports of shortages and price hikes as the Saudi construction boom fuels demand.
“Increased cement demand in the local market ... should improve sales of cement companies, especially after the restrictions imposed by the Ministry of Commerce and Industry to limit cement price manipulation by shipping companies,” BFA said.
Shares of Qasim Agricultural Company, whose prices fell 1.6 percent to SR103.25, dominated the market with the exchange of 3.2 million shares of the company.
Bisha Agricultural Company (BAC) enjoyed the highest hike as their prices rose 10 percent to SR198 with the exchange of 89,700 shares. BAC’s prices increased after the company’s board and general assembly cut the value of its shares from SR100 to SR50.
Prices of Saudi Electricity Company fell 1.1 percent to SR109.25 while SABIC dropped by 1.1 percent to SR1,248. However, 109,250 and 420,400 shares of the two companies were exchanged.
Turnover on the Saudi exchange also rose sharply last week, to SR79 billion ($21 billion) from SR52.8 billion.
The market index has already gained about 44 percent this year, on top of gains of more than 80 percent last year and 76 percent in 2003.
Arab stock markets, however, showed discrepancy in performance last week for a variety of reasons, but financial analysts said on Thursday they still considered regional stocks “bullish” in the medium and long terms.
Kuwaiti shares closed down yesterday for a second week amid signs of a major correction after prices of most stocks boomed to highly inflated prices, traders said.
The index nose-dived in the first four days of trading, losing 6.1 percent, but partially recovered on the last day of the week following optimistic statements by Prime Minister Sabah Al-Ahmad Al-Sabah.
The Kuwait Stock Exchange (KSE) index dropped to 8,053.60 points on Tuesday, its lowest closing since April 5, but gained 3.1 percent yesterday to finish the week at 8,303.70 points, down 3.2 percent from last week’s close of 8,576.90 points. The index is now 29.6 percent above the 2004 close of 6,409.50 points, but 6.1 percent below its all-time high of 8,692.70 points set on April 27.
Bahraini stocks slipped 1.7 percent in the week to Thursday. The index closed at 2,182.56 points, down from 2,220.38 points a week earlier, after hitting a record 2,229.57 on May 9.
Around 6.6 million shares worth 6.4 million dinars ($17 million) changed hands in the week, up from 5.9 million shares in the previous week.
Omani shares edged up last week. The Muscat Securities Market 30-share index closed at 4,560.17 points, up marginally from 4,556.68 points a week earlier. It is down from a high of 4,684.52 hit in late April, but still up 35 percent in 2005.
The benchmark Qatari share index climbed 4.8 percent in the week to Thursday in tumultuous trading. The Doha Securities Market index closed at 9,362 points, up 432 points from a week earlier. The index, down from a life high near 11,550 points hit in March, is still up 44 percent in 2005.
“Judging by market fundamentals, good first quarter results and improving political conditions in the region, we believe stocks are still bullish in the medium term and stand to score fresh gains in the weeks ahead,” said Wajdi Makhamreh, investment manager at the Jordan Finance & Investment Bank, Amman.
“Corrections that took place last week at some Arab bourses, including the Amman Stock Exchange (ASE), are a healthy phenomenon that paves the ground for new rebounds,” he said.
The ASE all-share price index fell 3.97 percent this week, closing at 6,263 points, down from 6,522 points last week, according to the market’s weekly report.
The United Arab Emirates stock markets of Abu Dhabi and Dubai also witnessed fluctuations and profit-taking moves, but all-shore price indices went up by 1.8 percent and 0.9 percent respectively.
“Corrections that swept the UAE markets over the past two weeks have scared small investors, but investment fund managers show better confidence in future because all factors influencing the market are still positive,” Zuhair Kiswani of the Sharhan Brokerage said.
— With input from Abdul Jalil Mustafa
