JEDDAH, 20 May 2006 — The Saudi stock market halted its successive declines last week and regained some of the losses it incurred over the past weeks.
Analysts attributed the rebound to the appointment of Abdul Rahman Al-Tuwaijeri as acting chief of the Capital Market Authority (CMA) after firing its former chairman.
The Tadawul All-Share Index (TASI) climbed 9.95 percent last week, closing on Thursday at 11,046.55 points, up from 10,046.83 points the previous week. The index gained 999.72 points in a week. However, TASI is still 33.9 percent lower than from the year’s start.
The market turnover increased to SR71.39 billion last week from SR68 billion in the previous week.
The newly listed Saudi Research and Marketing Group (SRMG) was the top gainer last week with an 83.70-percent increase in its shares. SRMG shares soared 106.52 percent on debut on Monday. Over SR2.96 billion worth of SRMG shares changed hands last week.
The top losers last week were SABB, down 7.70 percent, followed by Banque Saudi Fransi, 6.47 percent, and Samba Financial Group, 2.25 percent.
Saudi Basic Industries Corp. (SABIC) was most active by value as shares worth SR3.76 billion changed hands last week.
“We expect market fluctuations to be limited after most investment-grade stocks reached fair levels which should attract investors’ trading attention,” the Riyadh-based Bakheet Financial Advisors (BFA) said.
The consultancy house advised investors to “avoid” random speculation on stocks of companies with weak financial ratios, saying such behavior would have an “adverse effect on the market’s health.”
Saudi analyst Rashed Fawzan believed the benchmark price “succeeded in preserving its upward trend, thanks to the growing confidence in the market.”
Last week’s rebound at the Saudi stock exchange is expected to reflect positively on regional markets, given a marked growth in surplus income due to high oil prices this year, financial analysts said yesterday.
“I believe the Saudi bourse’s rebound and an expected surge in Arab surplus income will reflect positively on regional markets,” Nizar Taher, an analyst at the Ahliya Brokerage firm, told Arab News.
He attributed the recent declines at markets of Gulf countries to “political reasons including threats triggered by the row over Iran’s nuclear program.” “However, we believe that the income surpluses due to be cultivated by oil-producing countries will have positive offshoots at all other regional bourses in terms of new flows of money seeking investment outlets,” Taher said.
Jordanian shares also rebounded on Thursday after two days of extensive losses, which analysts blamed on a deep “profit-taking move” that focused on the service and investment sectors.
The all-share price index of the Amman Stock Exchange gained 0.3 percent last week, to close on Thursday at 7,100 points compared with previous week’s close at 7,079 points, according to the ASE weekly report.
Taher expected the upward trend to prevail at the Jordanian stock exchange in June in anticipation of better performance of the banking and industrial sectors in the second quarter of the year.
Kuwait’s KSE all-shares price index plummeted 7.8 percent last week, apparently due to the political turmoil that followed the opposition’s demand for questioning Prime Minister Sheikh Nasser Mohammad Al-Sabah in their bid to cut the number of the emirate’s constituencies, an Amman-based portfolio manager said.
The benchmark of the Kuwaiti market closed week at 9,400 points compared with 10,197 points in the previous week.
The unified all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi gained 5.2 percent last week, closing at 4,488 points up from 4,267 points in the previous week.
Egypt’s Hermes all-share price index gained 0.8 percent on Thursday to close week at 52,627.55 points, buoyed by news that the Hermes Holding Company had won a contract for conducting investment and banking operations in Saudi Arabia, analysts said.
