JEDDAH, 11 March 2007 — After rebounding strongly last week, the Saudi stock market dropped yesterday. The Tadawul All-Share Index (TASI) reversed earlier gains and fell 89.29 points to 8,683.15 after hitting high of 8,956.05 points earlier in the day.
The Saudi stock index jumped 7.29 percent or 596.07 points to 8,772.44 last week.
The stock market turnover was SR24.71 billion yesterday after crossing SR106 billion mark last week.
The Telecom and Insurance indices were in the positive territory while all other indices dropped yesterday. The Banking index was badly hit as it fell 349.40 points to 23,921.84 yesterday.
Shares of Al-Rajhi Bank, which plunged 48.21 percent last week, continued to fall yesterday. Al-Rajhi Bank shares edged lower by 4.16 percent to SR103.75. Shares of Riyad Bank, Saudi Hollandi Bank, Samba Financial Group and Bank AlJazira also declined yesterday. Over SR1.14 billion worth of Al-Rajhi Bank shares changed hands yesterday.
In the telecom sector, shares of Saudi Telecom Co. (STC) rose slightly to SR78.50 while Etihad Etisalat shares declined 1.23 percent to SR60.
Shares of Saudi Public Transport Co. (SAPTCO) fell slightly to SR23.50 yesterday after rising 6.74 percent last week. The company said it would hold a general assembly meeting in Riyadh on April 8. The agenda of the meeting includes consideration of a 25 percent increase in its capital from SR1 billion to SR1.25 billion by issuing bonus shares at the rate of one for every four held. Thus the number of shares will increase from 100 million to 125 million at the price of SR10 per share. The meeting will also consider the expansion of its activities to real estate sector, according to a statement of the company posted on Tadawul website yesterday.
Most financial analysts wanted Saudi bourse making balanced growth for the safety of investors as they fear that any sharp rise could be followed with sharp falls incurring big losses to dealers. They predicted that the index would stabilize at between 9,000 and 9,500 points.
Dr. Abdul Aziz Daghistani, an analyst, said a balanced growth was essential to inject confidence among stock market dealers. “Sudden rise of index will destabilize the market,” he added.
Abid Al-Harbi, a technical analyst, said the increasing number of initial public offerings (IPOs) and entering the market of Inmaa Bank would strengthen the bourse.
“The market has now returned to stability as investors have got more experience on how to deal with it properly,” he added.
