JEDDAH/AMMAN, 1 July 2006 — The Saudi stock market continued to act differently from other regional markets for the second consecutive week. The Tadawul All-Share Index (TASI) gained 3.27 percent or 415.90 points last week, crossing the 13,000-point level for the first time since early May and closing at 13,145.26 points, up from 12,729.36 points in the previous week.
TASI is currently 21.3 percent lower than the year’s start.
“We expect the earnings of listed companies in the first half of the year, particularly blue chips, to have the biggest impact on the market’s trend in the coming few weeks,” the Riyadh-based Bakheet Financial Advisors said in its weekly report. “Meanwhile, speculative stocks seem to be continuing their corrective retreat ahead of announcing their financial results which are expected to be poor.”
The stock market turnover crossed SR159 billion last week. Saudi Livestock was most active by value at SR8.76 billion, followed by Saudi Electricity Co. (SEC) at SR7.57 billion, Savola Group at SR5.60 billion, Al-Ahsa for Development Co. at SR5.05 billion and Saudi Basic Industries Corp. at SR4.26 billion.
Saudi Livestock was also top gainer last week as its shares soared 29.10 percent to SR43.25.
In the banking sectors, shares of SABB, Saudi Hollandi Bank and Bank Albilad declined while shares of all other banks edged higher last week
Meanwhile, Middle East stock markets continued to show mixed performance last week, but analysts said yesterday they expected the half-year results of listed firms, which are due to start coming out next week, would give clues as to the future directions of markets.
However, they told Arab News that an emerging “lack of confidence” in stock markets and hiking regional interest rates by respective governments to match those of the dollar could push prices further down.
“I believe investors will be monitoring the results of listed firms, particularly blue chips, to decide the makeup of their portfolios in the coming stage,” said Wajdi Makhamreh, investment manager and head of brokerage at the Jordan Finance & Investment Bank. “The persistent decline of share prices despite the availability of abundant liquidity particularly in the Gulf area could be indicative of diminishing confidence in stocks.”
Makhamreh said that raising interest rates by regional governments “could have a negative impact” on stock markets, as bank deposits become more attractive than investment in shares.
The Amman Stock Exchange witnessed a hard week, with the market’s all-share price index plummeting 5.91 percent under strong selling pressure.
The market’s benchmark price closed week on Thursday at 6,055 points, compared with previous week’s close at 6,435 points, according to the ASE weekly report.
“There is no justification for what is going on. The volatility can be attributed to the withdrawal of liquidity from the market due to the establishment of new firms and the subsequent subscription by the public,” Makhamreh said.
Kuwait’s KSE all-share index gained 0.7 percent last week, closing at 10,002 points compared with 9,929 points last week. The index is currently 12.6 percent lower than the year’s start.
Analysts believed that the sweeping victory scored by opposition groupings in Thursday’s general elections would have a “negative impact” on stocks in terms of retarded implementation of big projects. “I think there will be fluctuations at the Kuwaiti stock exchange in the coming couple of weeks until the composition of the new Parliament becomes clear,” an Amman-based analyst said.
The all-share price indices of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 6.6 percent and 2.09 percent respectively last week, closing at 424.6 points and 3,557 points.
