JEDDAH/AMMAN, 16 September 2006 — Saudi stocks rebounded strongly in the first three days of the week but failed to sustain the rally in the remaining days of the week. The Tadawul All-Share Index (TASI) shed 214.41 points or 1.87 percent, ending week at 11,240.53 points. The index closed at 11,454.94 points in the previous week.
On Wednesday the index dropped 386.61 points or 3.33 percent.
The TASI is currently 32.74 percent lower than the year’s start.
The stock market turnover, however, increased to SR163.45 billion last week compared to SR142.50 billion in the previous week.
Saudi Fisheries was top gainer last week as its shares closed 31.45 percent higher at SR244.50. Shares of Zamil Industrial, however, plunged 10.48 percent in a week to close at SR121.75.
“The Saudi stock market witnessed heavier speculation last week, leading to unjustified soaring by many stocks with weak financial figures,” the Riyadh-based Bakheet Financial Advisors (BFA) said in its weekly report. “It is worth mentioning, however, that speculative-grade stocks were subject to massive corrective retreat in the last trading day of the week, as most small cap stocks saw limit-down closes.”
The BFA expected a “continuation of the corrective decline” and at the same time a “rebound” by investment-grade stocks in the coming couple of weeks in the light of “optimism” over corporate Q3 financial results.
Arab stock markets are dominated by a state of “cautious optimism” as investors await clues to the performance of blue chip firms in the third quarter of the year, financial experts said yesterday.
They expected speculation in small cap shares to continue next week in the absence of reports about the third quarter results of leading companies.
“I believe a mood of cautious optimism will prevail in the coming couple of weeks pending signals as to the performance of blue chip firms,” Wajdi Makhamreh, deputy CEO of Osoul Brokerage Co., told Arab News.
“Investors apparently resorted to speculation in small cap firms in most Arab bourses last week and refrained from trading in strong shares because they preferred to wait for leaks about their third quarter results,” he said.
Makhamreh reported a “tangible rebound” in the Palestinian stock market as traders drew momentum from news of an imminent formation of a national unity government.
Fluctuation characterized the region’s largest bourses of Saudi Arabia, Jordan and Dubai, pushing prices down.
The Amman Stock Exchange (ASE) witnessed volatility last week as traders stuck to a strategy of recurrent profit taking moves instead of holding stocks for longer periods of times, Makhamreh said.
The ASE all-share price index fell 1.45 percent, closing week on Thursday at 6,318 points, according to the market’s weekly report.
In Kuwait, the KSE all-share price index gained 0.79 percent last week, closing at 9,984 points compared with 9,905 points last week.
“This week’s performance of the market indicates that the bourse posses the ability to push forward, thanks to the existence of supportive economic and political factors,” the Kuwait-based Bayan Investment House said in its weekly report.
The United Arab Emirates stock exchanges of Dubai and Abu Dhabi where the scene of fluctuations last week and the UAE unified all share price index shed 0.32 percent to close week at 4,807 points. Dubai’s benchmark price closed at 456.39 points.
Dubai-based analyst Mohammad Ali Yassin attributed the volatility to the “return of speculators to the market and their exploitation of the investors’ mood of optimism”.
Egypt’s Hermes all-share price index gained 1.2 percent on Thursday to close week at 54,428 points.
— With input from Abdul Jalil Mustafa
