JEDDAH/AMMAN, 21 April 2007 — Arab stock markets showed mixed performance last week, reflecting investors’ different responses to first-quarter earnings and political developments, financial analysts said yesterday.
The Saudi stock market fell further last week. The Tadawul All Share Index (TASI) declined 3.89 percent to close at 7,486.85 points, down from 7,789.76 points previous week.
The TASI plummeted further on Saturday when it lost 5.65 percent and closed at 7,349.69 points. However, the market recovered the rest of the week, buoyed by the first quarter earnings of the Saudi Basic Industries Corporation (SABIC), which reported a 50-percent rise in profits in the first quarter of the year relative to the first quarter of 2006.
SABIC’s net income in the three months to March rose to SR6.3 billion, compared with SR4.18 billion in the same period last year. SABIC’s shares gained 0.62 percent last week to SR121.75.
The TASI is currently 5.63 percent or 446.44 points lower than the year’s start.
The Riyadh-based Bakheet Financial Advisors (BFA) said in its weekly report that the market to “start stabilizing” after all corporate results of blue-chip firms were out. “We also expect strategic investors to restructure their portfolios in accordance with the declared financial results,” the BFA said.
Saudi Ceramic Co. in the industrial sector was the top gainer last week as its shares rose 2.71 percent to SR66.25. Shares of SABB in the banking sector also surged 1.24 percent to SR101.75 and Banque Saudi Fransi by 0.38 percent to SR66.25. Shares of National Industrialization Co. fell 37.72 percent to SR35.50, followed by Aseer Trading, Tourism and Manufacturing Co. by 31.68 percent to 34.50, Jouff Agriculture by 26.45 percent to SR44.50 and Tabuk Agriculture by 22.39 percent to SR50.25.
The stock market turnover also dropped sharply last week to SR47.34 billion from SR80.84 billion in the previous week.
Analysts expected Arab markets to remain subdued by the lower-than-expected first quarter results and the standoff between Iran and Western powers over Tehran’s nuclear program. “I believe regional markets will remain weak for the coming few weeks, which usually witness a retreat in activity after the publication of first quarter results,” Nizar Taher, head of brokerage at the Jordan National Bank, told Arab News. “I think stocks will be negatively affected by the continued row over Iran’s nuclear capabilities and the first quarter profits of listed firms which, I believe, will be lower than those achieved in the same period of 2006,” he said.
Jordanian shares came under continuous selling pressure throughout last week, against the backdrop of controversial irregular credit facilities amounting to $150 million that were reportedly extended to the general manager of a local firm by four banks without proper authorization, Taher said. “The Central Bank of Jordan is currently investigating the case, which we expect will continue to put downward pressure on the market next week,” he added.
The all-shares price index of the Amman Stock Exchange shed 1.26 percent last week, closing at 5,994 points compared with previous week’s close at 6,071 points, according to the ASE weekly report. Kuwait’s KSE all-share price index gained 2.3 percent last week, closing at 10,589 points up from 10,352 points last week.
The all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi gained 1.5 percent last week, crashing upward the 4,000-point psychological barrier and closing at 4,007 points, up from 3,945 points previous week. Analysts attributed the strong performance of the UAE stocks to the arrival of a “large number of speculators”, who were focusing on small cap shares.
The GulfBase GCC Index dropped 1.20 percent to 4,906.46 points last week. The value of GCC traded shares also declined by 13.26 percent to $22.80 billion. However, volume of GCC traded shares rose 9.85 percent to 5.47 billion last week.
