JEDDAH, 30 October 2005 — The Saudi stock market hit an all-time high yesterday on news Saudi Arabia has received approval from major trading nations for accession to the World Trade Organization (WTO).
The Tadawul All Share Index (TASI) broke the 15,000 barrier in morning trading and kept the momentum in the evening session to reach a record high at 15,305.59, up 306.73 points or 2.05 percent over Thursday’s closing.
The earlier record of 15,073.09 points was reached Oct. 12.
The TASI index is over 86 percent higher so far this year.
The value of the shares traded by 77 companies reached SR20 billion yesterday.
The Banking index gained 1,278.01 points to close at 36,286.30 points. Bank Albilad shares jumped 8.32 percent to close at SR866, followed by the Saudi British Bank (SABB) by 5.61 percent at SR1,505 and Riyad Bank by 4.56 percent at SR785.25.
Samba Financial Group Chief Economist Brad Bourland told Arab News that “if the stock market was reacting to the WTO news then it reflects the correct view that the WTO membership will be good for the economy and good for Saudi companies.”
Khan H. Zahid, chief economist and vice president of Riyad Bank, said: “For the last two to three weeks the Saudi stock market has been volatile because it’s been the earning season. And now as the earning season is over, the market is on a new path and will continue rising as long as you have booming liquidity.” He added: “The market could fall if there is some kind of confidence crisis, which I don’t see.”
The Industrial index was higher by 555.93 points at 38,526.63 as shares of Saudi Basic Industries Corp. gained 1.28 percent at SR1,524.25. SAFCO shares rose by 6.55 percent at SR1,286.
Faisal H. Alsayrafi, president and CEO of Financial Transaction House (FTH), said: “Under the WTO membership, the Kingdom will eventually allow foreign investors in the stock market. People will realize that the government has taken major steps such as the enactment of the capital market law and subsequently the Capital Market Authority (CMA) and have gone for insurance and banking liberalization which have boosted investor confidence.”
FTH is among the first four companies to get approval from the CMA to arrange services in private placements, public offerings and mergers and acquisitions. FTH also provides corporate finance advisory services to clients across the Middle East.
Alsayrafi said: “Ample liquidity is available because of high oil prices and the recent increase in salary of government employees. So people are investing extra money either in real estate or the stock market. There are only 77 companies listed and because of huge liquidity the volume of trading is very high.”
