JEDDAH/AMMAN, 16 December 2006 — The Saudi stock market witnessed frequent fluctuations last week, but the Tadawul All-Shares Index (TASI) gained 0.56 percent, closing at 7,950.42 points from 7,906.28 points the previous week. The TASI is currently 52 percent lower than the year’s start,
The Riyadh-based Bakheet Financial Advisors (BFA) attributed the continued volatility to “the wide gap among investors’ expectations as to the market’s trend”.
“Regrettably, the investors’ confidence has been traumatized due to an ongoing market corrosion nurtured by unconstructive gossip,” the BFA said.
They expected the Saudi government’s 2007 budget projections, to be announced soon, and the annual results of listed firms to influence the decisions of investors and consequently the trend of the market.
On Wednesday, the last day of the week’s trading, the Capital Market Authority (CMA) announced on its website that it has fined an investor SR2.4 million for carrying out fraudulent transactions. The CMA also also ordered Muhammad ibn Mouaid ibn Yahya Al-Qahtani to pay back SR88.6 million he made from illegal trading.
Shares of Al-Babtain Power & Telecommunication Co., which made debut on Tuesday on the Tadawul, gained 35 percent last week after rising 50 percent on the first day of trading. Al-Babtain shares closed Wednesday at SR54.
Shares of Saudi Arabia Fertilizer Co. (SAFCO) gained 9.36 percent last week to close at SR111 as the board of directors has proposed a cash dividend of SR600 million for the second half of 2006, equal to SR3 per share.
However, the stock market turnover declined last week. The value of shares traded reached over SR37.52 billion compared to SR43 billion the previous week. Over SR2.75 billion worth of Al-Babtain shares changed hands in two days of trading.
Arab stock markets witnessed another volatile week and financial analysts said yesterday they had concerns that the downward trend would continue.
“The performance of Arab markets last week indicates that the downward trend has not bottomed out yet,” an Amman-based portfolio manager told Arab News, asking anonymity. “Speculation, lack of confidence, hesitation and discrepancy in experts’ evaluation of market trends still characterize regional stock exchanges despite the drastic decline of prices over the past few months.”
He expected fresh plunges in the coming two weeks as investors monitor annual results of businesses and as a result of window-dressing operations usually conducted by investment funds ahead of the yearend.
Jordanian shares plummeted for the fourth week in a row, led by the heavyweight Arab Bank that lost 7 percent of its value last week.
The all-share price index of the Amman Stock Exchange fell further 3.88 percent, closing week at 5,333 points compared with previous week’s close at 5,548 points, according to the ASE weekly report.
Kuwait’s KSE all-share price index gained 0.82 percent last week despite reports about a government decision to cancel contracts concluded earlier with certain companies and the ongoing investigations over violation of revelation rules by some firms, traders said.
The benchmark price of the Kuwaiti bourse closed week at 9,674 points up from 9,595 points previous week.
“Despite the negative impact of such issues on the market, the bourse is expected to behave positively in the long term once such problems are settled,” said Kuwait-based analyst Jassem Al-Saadoun.
In the United Arab Emirates, the unified all-share price index of the stock exchanges of Dubai and Abu Dhabi rebounded marginally last week, closing at 4,106 points from 4,084 points previous week.
The UAE stocks lost 40 percent of their value since the beginning of the year, according to the market’s weekly report.
