JEDDAH, 9 July 2005 — The Saudi stock market was down for the second consecutive week despite rising oil prices. A Saudi banking expert, however, downplayed the impact of Thursday’s terror attacks in London on the market. “It was not affected by terrorist attacks within the Kingdom, so how can it be affected by the attacks in London?” he asked.
The Tadawul All Share Index (TASI) closed on Thursday at 12,729.05 points, down 1,100 points or 7.9 percent, compared to the peak performance of June 20. The index was down 5.4 percent last week.
The total value of shares exchanged also declined considerably from SR82.4 billion last week to SR59.0 billion. The industrial and banking sectors were the worst hit as prices of Saudi Basic Industries Corp. (SABIC), which dominates the market, fell by 8.1 percent.
The Industrial Index closed on Thursday at 29,498.99, down 171.94 points or 0.58 percent. The Banking index was 51.91 points or 0.17 percent lower at 31,139.48 on Thursday.
The Telecommunications Index was also closed on Thursday at 5,249.83, down 65.88 points or 1.24 percent.
Out of 75 stocks traded on Thursday, 58 were down and 14 were higher.
According to the weekly report of the Bakheet Financial Advisors (BFA), prices of most bank shares went down after making substantial gains in the past weeks. The prices of cement companies also went down last week, especially after financial results for the second quarter were out. It denotes that their profits were not up to the expectations of investors, the BFA said.
TASI is currently 55.1 percent higher that the year’s start, the BFA said.
The report expected Saudi stocks to continue “a cautious” behavior as investors monitored the semi-annual results of listed firms, particularly blue chips. “These results will decide the market trend in the next period,” the BFA said in its report.
Arab stock markets are expected to ignore the ramifications of Thursday’s bombings in London and focus next week on semi-annual results of listed firms which have started to come out, financial analysts said yesterday.
“International stock markets could react to the London blasts, but I don’t believe the incident will have any impact on Arab bourses,” Wajdi Makhamreh, investment manager and head of brokerage at the Amman-based Jordan Investment & Finance Bank, told Arab News.
Makhamreh and Amer Muasher, head of brokerage at the Jordan National Bank, believed regional bourses were on the verge of a fresh surge, buoyed by good half-yearly results and the advent of large funds seeking investment outlets, particularly in Jordan and Gulf states. “I think stocks will derive fresh momentum from second quarter results and high liquidity, because alternative investment outlets cannot provide competitive profits,” Muasher said.
The all-share price index of the Amman Stock Exchange gained 3.58 percent in the week ending on Thursday at 7,639 points from 7,375 points last week, according to the ASE weekly report.
The market’s weekly turnover also increased by 25 percent, reaching a record level of 605 million dinars ($855 million), the report said.
UAE stocks plummeted unexpectedly last week, with the stock exchanges of Abu Dhabi and Dubai losing 5.6 percent of their market capitalization, dealers said. The all-share indexes of Abu Dhabi and Dubai stock exchanges fell by 4.5 percent and 9.7 percent to close at 5,451 points and 984.3 points respectively.
Zuhair Kiswani from the Dubai-based Sharhan Investment Center attributed the sharp decline to “lack of coordination” among banks and firms which decided to raise their capital through capitalization of their profits. However, he expected UAE markets “to stabilize, and possibly to rebound” this week after last week’s turmoil.
Egypt’s Hermes all-share price index gained 1.4 cent last week, closing at 42,342 points compared to last week’s close at 41,771 points.
— With input from Abdul Jalil Mustafa
