JEDDAH, 13 May 2006 — The Saudi stock market continued to plunge last week. The Tadawul All-Share Index (TASI) shed 21.21 percent or 2,704.56 points last week, the highest weekly decline in the stock exchange’s history, closing on Thursday at 10,046.83 points compared with previous week’s close at 12,751.39 points.
The TASI is currently 39.9 percent lower than at the year’s start.
The Riyadh-based Bakheet Financial Advisors (BFA) said in a statement, “We expect the market to be volatile since many investors lack the skill to evaluate the attractive levels of most investment grade stocks.”
The report warned investors against “following rumors that usually have adverse effects on the market’s health”.
Over SR68 billion worth of shares changed hands last week. On Thursday the market turnover was SR6.75 billion as the TASI closed 27.78 points down from Wednesday’s closing.
The long gainer last week was Saudi Fisheries, while all other shares declined. Saudi Fisheries stocks gained 15.43 percent in week to close at SR46.75. The top losers last week were Zamil Industrial Investment Co., Filling & Packing Materials Manufacturing Co., Saudi Advanced Industries Co., Saudia Dairy & Foodstuff Co. and Saudi Arabian Amiantit Co.
Saudi Basic Industries Corp. (SABIC) shares dropped 26.26 percent in a week to close at SR132. SABIC was most active by value at SR5 billion last week, followed by Al-Rajhi Bank at SR3.60 billion, Saudi Telecom Co. (STC) at SR3 billion, Savola Group at SR2.71 billion and Yanbu National Petrochemical Co. (YANSAB) at SR2.43 billion.
Shares of STC closed 17.98 percent down to SR103.75 and Etihad Etisalat’s 25.71 percent lower to SR65 last week.
Arab stock markets will continue in the coming few weeks to be a reflection mainly of the performance of the region’s larges stock market, the Saudi bourse, which witnessed a historic slippage of 21.2 percent last week, analysts said on Thursday.
“I believe the plummeting Saudi market will continue to reflect prominently on regional markets, particularly in the Gulf countries,” an Amman-based portfolio manager told Arab News. “As long as speculation rather than fundamentals continues to be the key moving factor, I don’t see a breakthrough in the offing,” he added.
Analysts also attributed the nosedive at Saudi, United Arab Emirates and other regional bourses to the fact that banks were insisting on liquidating holdings of overdraft clients with every new wave of price declines.
Volatility also characterized the Amman Stock Exchange last week, but high demand for the Arab Bank stock apparently helped to keep the Jordanian shares steady.
The ASE all-share price index gained 0.4 percent last week, to close on Thursday at 7,079 points up from 7,051 points last week.
Kuwait’s KSE all-share price index fell 5.3 percent to close week at 9,659 points, down from previous week’s close at 10,197 points.
The United Arab Emirates shares were the second casualty in the region last week after the Saudi market.
The unified all-share price index of the UAE stock exchanges of Dubai and Abu Dhabi plummeted 12.4 percent closing on Thursday at 4,267 points compared with 4,869 points last week.
