JEDDAH, 27 August 2005 — The Saudi stock market continued to break new records for the third week in a row, propelled by soaring oil prices on the world market.
The Tadawul All Share Index (TASI) gained further 3.6 percent last week, closing on Thursday at a record high of 14,833.69 points. The TASI index was up 177.09 points or 1.21 percent from Wednesday’s closing of 14, 656.60. Out of 77 stocks traded on Thursday, 50 were higher while 26 stocks were down.
The Industrial Index gained massive 1,229.23 points or 3.23 percent on Thursday to close at 39,341.67. Saudi Basic Industries Corp. (SABIC) stock closed 3.73 percent higher on Thursday at SR1,641. However, the Telecom Index was down 43.51 points at 5,693.10 on Thursday. Saudi Telecom Co. (STC) and Etihad Etisalat shares were lower at SR950 and SR650 respectively.
The TASI is currently 80.8 percent higher than the year’s start, the Bakheet Financial Advisors (BFA) said in its weekly report.
BFA expected a positive impact for oil prices on stocks in the coming weeks. “It seems that many investors maintain a direct linkage between oil prices and profitability of listed companies,” the BFA said.
However, experts warned against a “strong corrective retreat” in prices of speculative stocks, following unjustified rises.
Financial analysts predicted that the index would continue to make upward march in the wake of growing oil prices. There are reports that oil prices would cross $70 per barrel in the coming weeks. This would again have positive effect on the Kingdom’s budget. They also said the huge allocations made by the government from budget surplus for various welfare projects would strengthen the economy and would have positive impact on the stock market.
A woman banker told Asharq Al-Awsat, a sister publication of Arab News, that Saudi women have gained a lot of experience in how to deal with stock market without making losses. “They are very cautious and prefer to invest in the stocks of leading companies,” she said and described stock market as one of the best choices for women’s investment.
“I believe all stock exchanges in the region will draw benefit from the unprecedented crude prices in terms of huge surplus petrodollars that seek investment outlets,” Saqr Abdul Fattah, investment manager at the Housing Bank for Trade and Finance, Amman, told Arab News.
“Therefore, we expect liquidity to remain high with investors focusing attention on the third quarter results. However, we expect markets to be calm and in a consolidation phase in the coming coupe of weeks pending the advent of new factors,” he said.
In Kuwait, the KSE all-share price index gained 1.7 percent last week, closing at 9,493 points from 9,333 points previous week. Trading focused on blue chip firms, while small caps lost ground, dealers said.
The UAE bourses went up 3 percent in average amid varying performance of listed firms. The all-share price index of the Abu Dhabi and Dubai Stock Exchanges gained 1 percent and 4.8 percent, closing at 5,165.8 points and 1,080.4 points respectively.
The ASE all-share price index edged higher in the week ending on Thursday at 8,010.82 points, compared with previous week’s close at 8,009.81 points, according to the market’s weekly report. “I expect the Jordanian shares market to remain lackluster in the coming few weeks until the Q3 results start to come out,” Abdul Fattah said.
In Egypt, the Hermes all-share price index gained 1.97 percent, closing at 41,706 points, compared to previous week’s close at 40,897 points.
