JEDDAH, 11 April 2006 — The Saudi stock market dived 8.3 percent yesterday in panic selling following Sunday’s suspension of two dealers by the Capital Market Authority (CMA) for manipulating the stocks of three companies.
The decline was the sharpest by any Gulf Arab market since March 14 when bourses plunged across the world’s biggest oil-exporting region.
Gulf stock markets appeared to have recovered from that downturn until yesterday’s evening session on the region’s largest bourse.
Due to plunge in Banking and Industrial indexes, the Tadawul All-Share Index (TASI) tumbled 1,457.96 points to close at 16,099.06 yesterday.
Faisal H. Alsayrafi, president and CEO of Financial Transaction House, told Arab News, “Whenever traders are caught in illegal activities, the followers of those traders panic. This in turn affects the market either positively or negatively. This is what happened today (Monday). The reaction was negative.”
He added: “The other major factor is absence of technical and fundamental information of the listed companies. . . I believe in the long term the market will correct itself, especially in the low performance companies.”
The Banking Index dropped 3,677.44 points or 7.98 percent to 42,379.93 as shares of all listed banks declined yesterday. Despite 87.5 percent increase in profits in first quarter, shares of Al-Rajhi, Saudi Arabia’s largest listed bank, fell 6.96 percent to SR467.50. Al-Rajhi Bank posted a net profit of SR1.75 billion yesterday.
The Industrial Index closed 3,266.58 points or 8.22 percent lower at 36,472.69. Shares of petrochemical giant Saudi Basic Industries Corp. (SABIC) fell 7.59 percent to SR1,430. In the telecom sector, shares of Saudi Telecom Co. (STC) and Etihad Etisalat declined 7.50 percent to SR212.75 and 9.89 percent to SR123, respectively.
SEC shares were most active by value yesterday at SR2.02 billion, followed by STC, SR1.49 billion, SABIC, SR1.48 billion, Al-Rajhi Bank, SR1.18 billion and Savola Group, SR1 billion.
The Insurance Index plunged 9.90 percent at 2,400.42 as shares of the National Company for Cooperative Insurance (NCCI) dropped to SR173. Over SR22.55 billion worth of shares changed hands yesterday compared to SR24.64 billion on Sunday.
Out of 79 shares traded, 77 companies declined while shares of two companies - Food Products Co. and Aldrees Petroleum & Transport Services Co. - rose yesterday.
Saudi Electricity Co. (SEC), the fourth-largest company by market capitalization, had fallen by almost the maximum 10 percent allowed in a single trading day. SEC shares dropped 9.97 percent to SR146.75.
— With input from Reuters
