JEDDAH/AMMAN, 14 October 2006 — Saudi stocks experienced a volatile week as more listed firms released their results for the third quarter of the year.
The Tadawul All-Share Index (TASI) gained 1.17 percent last week, closing at 10,989.99 points up from 10,862.64 points in the previous week.
“While most companies managed to raise their profits for the first nine months of the year compared with the same period of last year, the results of the third quarter showed a retreat in profits relative to the second quarter,” the Riyadh-based Bakheet Financial Advisors (BFA) said in their weekly report.
“The corporate profits of the third quarter have negatively affected the psychology of traders,” the report added.
The BFA expected the release of the third quarter results of the Saudi Basic Industries Corporation (SABIC) and the Saudi Telecom Co. (STC) to have a “profound effect” in determining the direction of the market for the next period.
The stock market turnover declined to SR93.70 billion last week from SR107 billion in the previous week.
Shares of the Emaar Economic City (EEC), which started trading last Saturday, closed the week at SR36.50, up 265 percent. However, most of the investors who were expecting Emaar share price to touch SR500 on opening and make quick profits were disappointed. Emaar shares, after making debut at SR30.50, fluctuated throughout the week in narrow range. Emaar share price reached as high as SR40.25 on Tuesday. Emaar shares are traded in the Services sector.
Rashid Al-Fowzan, a financial analyst, said the lack of good response from investors to Emaar shares shows that the market has not yet recovered from the previous crash. He urged investors to be cautious while taking decisions, as they should not be cheated by rumors of speculations.
However, Emaar was most active by value as over SR9.40 billion worth of shares changed hands last week, followed by Al-Rajhi Bank at SR5.78 billion.
Shares of Saudi Fisheries plunged 40.76 percent last week to close at SR164.25.
Arab stock markets are expected to remain “volatile” until after the feast of Eid Al-Fitr that marks the end of the fasting month of Ramadan, financial analysts said yesterday. They also expected most investors to assume cautious approaches pending the release of all third quarter results mainly of leading firms.
“I believe volatility will continue to characterize all regional stock markets until the end of the Eid Al-Fitr holiday,” an Amman-based portfolio manager said.
“However, we expect markets to pick up after the Muslim festivities that mark the end of the fasting month,” he added.
The holy month of Ramadan is due to come to an end on Oct. 22 or 23. Afterward, most Arab and Islamic countries usually observe a one-week holiday.
The all-share price index of the Amman Stock Exchange inched up 0.26 percent last week to close on Thursday at 6,136 points, according to the ASE weekly report.
Analysts attributed the violent fluctuations of the Jordanian shares to investors’ concerns and skepticism regarding the third quarter profits and lack of liquidity in the market. Kuwait’s KSE all-share price index gained 1.6 percent last week, to close at 10,445 points compared with previous week’s close at 10,285 points.
The benchmark price of the United Arab Emirates stock exchange of Dubai moved downward marginally amid thin trading, closing week at 437.16 points compared with 437.27 points last week.
