RIYADH, 23 March 2006 — The Saudi bourse closed a jittery session yesterday 3.2 percent lower after having nearly touched the 5 percent limit down amid reported selling by large funds.
The all-share index ended at 15,861.54 points after it fell by up to 4.92 percent minutes before close.
Total traded volumes reached 7.43 billion riyals ($1.98 billion) against 20.4 billion riyals on Tuesday when the index lost 2.69 percent. Average daily turnover stood at around 40 billion riyals before a downturn began last month.
“The size of bids on several blue chips was too big for retail investors,” said a senior trader. There was heavy selling in the two largest listed firms, SABIC and Saudi Telecom (STC), which along largest listed bank, Al-Rajhi, accounted for around half the day’s turnover, he added.
“Demand is poor ... We are in a situation that looks pretty much like the start of the previous correction,” said the trader, who asked not to be named.
Mohamed Al Hagbani, from Al-Rajhi Bank said some investors were still trying to break even by setting order in their portfolios while others try to pocket profit the same day.
Authorities have pledged to let foreign residents buy stocks directly from Saturday and to split shares by 80 percent, in a bid to end a sharp correction that slashed more than 30 percent off the bourse’s capitalisation in two weeks.
“Investors active in the market feel the market has not stabilised yet ... The new decisions are not clear and the Capital Market Authority (CMA) needs to clarify them,” said Ali Al-Jaafari, head of Al-Mua’shir Financial Consultancy.
