JEDDAH, 26 April 2006 — Saudi stocks surged to a record single-day gain yesterday due to a sharp increase in major Banking and Industrial indexes.
The Tadawul All-Share Index (TASI) jumped 8.13 percent or 1,025.34 points to 13,637.08 after the Council of Ministers instructed authorities on Monday to take all necessary measures to stabilize the stock market. Saudi financial analysts, meanwhile, called for a specialized financial court to settle disputes related to the stock market. They also urged authorities to enact legislation to monitor boards of joint stock companies.
The Banking Index rose 2,440.12 points to 41,033.95 and the Industrial Index edged higher by 2,329.25 points to 27,633.45 as shares of all companies made hefty gains yesterday. The Saudi equity market is 18.40 percent or 3,075.56 points down since the start of the year. The index closed at 16,712.64 points on Dec. 31, 2005.
Over SR19.62 billion worth of shares changed hands yesterday compared to SR11.66 billion on Monday.
According to the National Commercial Bank, the stock market plunge this year has cost investors more than SR1 trillion. The market valuation which touched nearly 47 price earnings multiple (PE) on 2005 income on Feb. 25, 2006, when the TASI reached an all-time high of 20,634.86 points, has adjusted downward to around 34 last week.
On the projected earnings for this year, the price earnings multiple is now hovering on the line of 30 PE, which can be absorbed by investors.
The cumulative value of shares traded so far this year has reached SR2,032 billion, an increase of 155 percent on SR797 billion recorded during the first four months of last year.
