JEDDAH, 20 April 2006 — The value of Saudi stock suffered losses worth more than SR1 trillion following fluctuations in the market during the past two months but regained SR448 billion, bringing the net loss to SR563 billion, experts said.
According to an analysis carried by Al-Jazirah Arabic daily, the market lost SR472.3 billion by the middle of March as result of recurrent fall of the index.
“The total market value of Saudi stocks declined from SR2.9 trillion by the end of February to SR2.4 trillion by March 16,” said analyst Dr. Hassan Al-Shaqti.
“This was followed by sharp declines, especially during the first week of April, to bring the value further down to SR2.3 trillion,” he explained.
Saudi shares, however, closed yesterday one percent higher after a see-saw session that saw them dive five percent to eight month lows then climb five percent into positive territory.
The all-share index TASI ended down 1.07 percent at 13,088 points, after swinging between a low of 12,419.08 points and a high of 13,902.33. The session was dominated by Saudi Basic Industries Corp (SABIC).
Last Monday, the stocks tumbled to an eight-month closing low as a tentative rebound ran out of steam. The index ended 3.93 percent lower at 14,203.74 points, its lowest close since Aug. 13 and more than 32 percent below its peak in February.
Shares began to fall a week ago after the regulator, Capital Market Authority (CMA) suspended two dealers on suspicion of market manipulation.
The market’s previous tumble in February and March was also caused by a tussle between speculators and regulators, after the authorities tried to reduce the daily trading band.
Analysts said the battle was not over yet. “The market is dominated by speculation from big players,” said Ahmed Ghandour, financial analyst at Bursah Expert. “As soon as they make some profit they pull out, which does not help assure retail investors,” he added.
Analysts said there was some selective buying as investors took advantage of cheaper prices. But compared to other emerging market assets, Saudi stocks remain very expensive.
There are nearly five million Saudi and foreign investors in the bourse, the largest in the Arab world. “If we exclude children below 15, one out of three individuals in the Kingdom are investors in the market,” Al-Shaqti said.
According to him, stock market losses would not affect companies listed on the bourse. “When the index falls traders are the main losers,” he pointed out.
