JEDDAH/AMMAN, 25 June 2005 — The Saudi stock market, the Arab world’s largest bourse, showed strong fluctuations this week with the benchmark price approaching the 14,000-point psychological barrier on Sunday, but falling sharply later.
The Tadawull All Share Index (TASI) gained 2.9 percent this week, closing on Thursday at 13,679.04 points, compared to last week’s close at 13,288.87 points. The TASI is currently 66.7 percent higher than at the year’s start, according to the Bakheet Financial Advisers (BFA).
The Saudi stock market was driven by the Saudi Basic Industries Corp. (SABIC), soaring crude prices and recovering petrochemical prices, the BFA said. Saudi Arabia is the world’s largest crude exporter.
The BFA expected investors “to remain in a cautious mood ahead of the release of the second quarter results, particularly for blue chips which are set to determine the market’s trend in the coming weeks”.
The Saudi bourse compensated 86 percent of the losses it suffered last week (on Wednesday) as the index rose by 325.93 points. As many as 28.1 million shares worth SR8.4 billion were exchanged in 92,400 deals.
A spate of speculation is expected to remain the key driving force at Arab stock markets in the coming couple of weeks with investors receiving fresh incentives from leaking half-yearly results of listed firms, high liquidity and surging oil prices, analysts said yesterday.
“I believe markets are in a cautious mood as a wave of speculation and casino style trading continue to dominate bourses ahead of the second quarter results,” Wajdi Makhamreh, investment manager and chief of brokerage at the Jordan Investment & Finance Bank, told Arab News.
“As a result of successive price rises, most of stocks are becoming overvalued, but the flood of money to markets mainly due to huge income accruing to oil-rich Gulf states is creating a positive sentiment that could generate fresh stock gains in the coming weeks,” he added.
Makhamreh spoke against the backdrop of fresh gains scored this week by bourses of Saudi Arabia, Jordan, Kuwait and Egypt, all of them hit all-time highs.
The all-share price index of the Amman Stock Exchange climbed 4.04 percent to close on Thursday at 7,493.47 points, up from 7,202.72 points last week, according to the ASE weekly report.
“Trading continue to focus on investment and real estate firms, which are expected to show strong performance in the first half of the year due to the sharp rise in real estate prices,” Makhamreh said.
In Kuwait, the KSE all-share price index rose 2 percent, closing at 8,796 points from 8,617 points last week, as investors appeared to move away from the Public Stores Group, which was the focus of trading since February, when the firm was awarded a large Pentagon contract.
Egypt’s Hermes all-share price index surged 8.5 percent this week, closing at 42,964 points from 39,586 points last week. The Egyptian market gained fresh momentum from the privatization of two firms and the presence of Gulf funds, analysts said.
