JEDDAH/AMMAN, 9 December 2006 — The Saudi stock market continued to plunge last week. The Tadawul All-Share Index (TASI) tumbled additional 5.02 percent, closing at 7,906.28 points on Wednesday from 8,324 points the week before. The index dived over 6 percent to 7,665.73 on Sunday, the lowest close since late 2004.
TASI is currently 52.7 percent lower than the year’s start.
The Riyadh-based Bakheet Financial Advisors (BFA) said in their weekly report: “Negative spreading rumors recently inflicted the market with uncertainty, causing investors to be susceptible to dubious word-tipping.”
They expected markets to be “volatile” in the coming weeks with the approaching announcement of annual corporate results.
The stock market turnover also dropped last week. Over SR43 billion worth of shares changed hands compared to SR57 billion in the previous week.
Al-Baha Investment & Development Co. was most active by volume and value last week at 80,135,232 and SR2.86 billion, respectively. Al-Baha’s shares closed 31.28 percent down last week at SR30.75.
Shares of all listed banks were in the red last week. Shares of Saudi Hollandi Bank dropped by 11.01 percent to SR74.75, Bank AlJajira by 10.97 percent to SR138 and SABB by 10.55 percent to SR125 in a week. Al-Rajhi Bank shares fell 7.98 percent to SR184.50 and Samba Financial Group by 7.73 percent to SR137.25.
In the industrial sector, shares of the petrochemical giant Saudi Basic Industries Corp. (SABIC) declined 1.66 percent to SR103.75.
In the telecom sector, shares of Saudi Telecom Co. (STC) and Etihad Etisalat fell 1.97 percent and 6.90 percent, respectively.
Arab stocks suffered fresh losses last week amidst persistent speculation and retreating oil prices, and financial analysts said yesterday regional markets were “directionless” as investors awaited fresh clues, including annual results of businesses.
They pointed out that declining oil prices on the world market were “adversely affecting” Middle East bourses, given the fact that surplus petrodollars had played a key role in the bullish trend that characterized Arab stocks over the past couple of years. “I see regional markets directionless in the coming few weeks,” analyst Nizar Al-Taher from the Amman-based Ahliyah Brokerage Co. told Arab News.
“Two factors operating in opposite directions will be at work toward the end of the year,” he said.
“One positive factor is the good annual results we expect for listed firms, while the traditional window-dressing sales before the end of the year are expected to have an adverse impact on markets,” he added.
He attributed the adamant bearish trend that dominated regional bourses since the beginning of the year mainly to speculation, shrinking liquidity and the declining crude prices.
“Performance at leading markets like the Saudi stock exchange has been affecting other regional bourses due to the fact that a large number of Gulf investors are trading at several markets at the same time,” Al-Taher said.
Jordanian shares showed marked volatility last week that reflected the fluctuating volume of liquidity in the market, Al-Taher said. “The prices of stocks have gone down to levels that should provide buy incentives,” he added.
The all-share price index of the Amman Stock Exchange shed 1.07 percent last week, to close at 5,548 points compared to previous week’s close at 5,608 points, according to the ASE weekly report.
Kuwait’s all-share price index also lost further 1.65 percent last week, closing at 9,595 points, the lowest in 16 months, from 9,755 points in the previous week.
Kuwaiti shares suffered last week following the government’s decision to cancel contracts with two key firms and the continuing investigation with about 50 companies over violation of revelation rules, traders said.
