JEDDAH, 16 June 2007 — The Saudi stock market continued its downward trend last week. The Tadawul All-Share Index (TASI) fell by 3.92 percent or 288.45 points last week to 7,074.51 compared to previous week’s close at 7,362.96.
The continuing IPO of Jabal Omar Development Co., which opened for subscription on June 9, also contributed to the stock market fall as it attracted huge investment in first week of its opening.
According to Bank Albilad, manager of Jabal Omar IPO, as many as 2,051,191 Saudis subscribed to the company’s shares investing more than SR1.95 billion by Thursday. They bought a total of 194,891,550 shares or 96.77 percent of shares offered to the public.
The largest of 345,083 or 68 percent of total subscribers came from the Central Province, 150,200 or 30 percent from the Western Province and 8,221 or two percent from the Eastern Province. Eighty-six percent of investors used electronic means to purchase shares while the rest bank branches.
The top gainers last week were Saudi Fisheries as its shares soared 17.55 percent to SR88.75, followed by Ahmed H. Fitaihi Company, up 2.97 percent to SR26.
Shares of Makkah Construction & Development Co. dropped 17.82 percent last week to SR35.75 and the National Company for Glass Industries by 13.85 percent to SR42. Saudi Basic Industries Corp. (SABIC) shares fell 3.78 percent last week to SR114.50.
Shares of the telecom companies performed badly last week as the Council of Ministers on Monday licensed Kuwait’s Mobile Telecom Company (MTC) to operate the Kingdom’s third mobile phone network. The MTC-led consortium won the bid with an offer of SR22.91 billion ($6.11 billion). Shares of Saudi Telecom Co. (STC) declined 4.78 percent to SR59.75 and Etihad Etisalat by 4.48 percent to SR48 last week. The stock market turnover, however, rose last week to SR31.78 billion compared to SR27.54 billion in the previous week.
The GulfBase GCC Index also fell 1.12 percent in a week to 5,194.77 points. The value of GCC traded shares, however, increased 19.73 percent to $15.98 billion and volume rose 41.07 percent to 7.51 billion shares.
The Capital Market Authority (CMA) announced on Wednesday that shares of Saudi Kayan Petrochemical Co. will start trading on Tadawul from June 23.
Saudi Kayan’s initial public offering (IPO) in May was a huge success as it was almost four times oversubscribed. Saudi Kayan raised SR6.75 billion in an IPO.
The CMA yesterday launched a specialized center on the Internet to educate stock market dealers and help them make sound investment decisions. It has three sections. The first section contains three booklets on investment in stocks, investment funds and reading of financial statements. The second includes 81 lectures on investment the CMA had organized in different parts of the Kingdom last year. The third section is a comprehensive investment site, which is first of its kind in the Middle East.
Dr. Abdul Rahman Al-Tuwaijri, chairman of the CMA, said the site was set up as part of the authority’s efforts to promote a culture investment in the Kingdom’s stock market and enhance investment awareness of market dealers.
Meanwhile, according to a report by the Kuwait-based Global Investment House (Global), GCC stock markets witnessed strong buying interest in May as four out of the six regional indices registered double-digit gains. UAE market led the way with the NBAD Index recording a monthly growth of 14.5 percent.
At the end of the month, all the GCC indices barring Saudi Arabia have recorded YTD growth with Kuwait registering a strong YTD growth of 25.6 percent as a result of positive investors’ sentiments.
GCC bourses saw 29.6 billion shares being traded in May as compared to 21.4 billion shares traded in April. Value of shares traded on the bourses increased to $101.1 billion in May as compared to $96.6 billion reported in the previous month. UAE market witnessed heightened trading activity as the aggregate volume of shares traded on the bourses in May reached 16.7 billion shares as compared to 8.6 billion shares recorded in April.
GCC stock market breadth was highly skewed toward the advancers in May as 317 stocks registered monthly gains as compared to 168 losers. The strong buying interest in the Qatari market can be seen from the fact that out of 36 listed stocks, 33 reported monthly gains. Although Saudi market recorded marginal gains during the month, it had a negative advance-decline ratio with 36 advancers as compared to 48 decliners in the month.
