DUBAI, 29 March 2007 — Saudi Arabia’s stock index ended below 8,000 points for the first time since Feb. 14 spurred by declines in its largest stock, while Oman Telecommunications Co. (Omantel) dragged Muscat’s bourse to its lowest finish in more than three months.
Dubai’s stock market, however, made its biggest one-day gain in six weeks yesterday. Only Kuwait’s stock market index is up year-to-date after markets in Dubai, Saudi Arabia and Oman erased all of their 2007 gains this month.
The Tadawul All-Share Index (TASI) fell for a third day, dropping 1.57 percent to 7,889.74 points, its first time closing below 8,000 points since Feb. 14, and extending three days of losses to 8.5 percent.
Saudi Basic Industries Corp. (SABIC), the world’s largest chemicals firm by market value, led declines, falling 2.52 percent. “There are a lot of market rumors that the index will drop because it has rallied so much, which is leading retail investors to sell,” said Ibrahim Al-Alwan, deputy chief executive at KSB Capital Group.
“People are sending SMSs to each other and hearing it on television,” he said.
One or two big day traders have been exiting the market ahead of first-quarter results, analysts, including Youssef Kassantini, chief executive at Bourse Experts, said this week.
Dubai’s benchmark has fallen 10.3 percent since the first trading of the month after a disappointing dividend triggered selling in Emaar Properties, the largest Arab developer by market value.
But the index took a turn for the better on expectations that large firms would come out with strong first-quarter results next month, and make forward valuations more competitive, said Wadah Al-Taha, head of strategy and business development at Emaar Financial Services. The index rose 1.49 percent to 3,745.17 points, its biggest one-day gain since Feb. 14.
Emaar, which has tumbled 16.34 percent this month to Tuesday, rose 3.26 percent, while Dubai Islamic Bank climbed 3.55 percent, after falling 22.23 percent this month. “The other major factor in the markets is political,” said Taha.
Markets in Qatar and Bahrain also rose, while Abu Dhabi extended losses into a fifth trading day and profit-taking weighed on Kuwait shares after the index posted its biggest single-day drop in seven weeks on Tuesday.
The biggest decliner in the Gulf was Oman, which fell 1.66 percent to 5,532.64 points, its lowest close since Dec. 13.
Omantel, the biggest decliner and the largest stock on the index, dropped 7.87 percent after its 70 percent cash dividend was deducted from its share price, said Khalid Abdul Nabi, head of the brokerage department at Gulf Investment Services.
