JEDDAH/AMMAN, 14 July 2007 — The Saudi stock market made hefty gains last week, buoyed by emerging reports about the performance of blue chip firms in the first six months of the year.
The Tadawul All-Share Index (TASI) climbed 3.94 percent or 282.68 points, closing the week at 7,451.38 points, up from 7,168.70 points in the previous week.
TASI is currently 6.1 percent lower than the year’s start.
The Riyadh-based Bakheet Financial Advisors (BFA) reported a retreat in the profits of the banking sector in the first half of the year compared with the same period of 2006 due to the plunge in the stock trading commissions and brokerage fees in the second quarter of the year.
“However, profits of all banks for the second quarter of 2007 increased unexpectedly compared with the first quarter of the year despite a 26 percent decrease in the trading volume,” the report said.
The BFA said that the market was awaiting the declaration of the midyear results of leading firms such as the Saudi Basic Industries Corp. (SABIC) and the Saudi Telecom Co. (STC) to decide the direction of the market in the coming weeks.
Kasb Group has predicted that SABIC would make a second quarter profit of SR6.45 billion while STC SR2.73 billion.
The group pointed out that the first half results of Yamamah Cement were close to its predictions. The group’s predictions about first quarter results of SABIC and STC came very close to actual figures with a slight difference of less than two percent.
Financial analyst Abdullah Katib attributed the improvement of index last Wednesday to leakage of information about a possible record profit for SABIC in the first half. The good results of Saudi Arabia Fertilizers Co. (SAFCO), in which the Saudi petrochemical giant has stakes, supported their optimistic expectations of market dealers, he pointed out. Katib believed that the stocks of Kingdom Holding Co. (KHC) would have a tremendous impact on the market.
The stock market turnover also surged to SR40.49 billion last week compared to SR23.55 billion in the previous week.
The top gainers last week were Ahmed H. Fitaihi Company as its shares soared 35.45 percent to SR37.25, Malath Insurance 23.93 percent to SR36.25, Saudi Hotels & Resort Areas Co. 22.66 percent to SR39.25 and Qassim Agriculture by 18.84 percent to SR20.50.
Shares of SABB Takaful fell 15.27 percent to SR111 and Saudi Electricity Co. (SEC) by 2.17 percent to SR11.25 and Riyad Bank by 0.92 percent to SR54 last week. Shares of all other banks were in positive territory last week.
Saudi Basic Industries Corp. (SABIC) shares made solid gains of 7.05 percent to SR125.25 last week.
In the telecom sector, shares of Saudi Telecom Co. rose 1.24 percent and Etihad Etisalat by 7.58 percent.
Arab markets last week drew benefits from first reports about the performance of blue chip firms in the first half of the year, but financial analysts said yesterday they expected regional markets to remain generally cautious in the coming couple of weeks.
They also expected the speculation to remain a key factor in deciding the direction of stocks out of investors’ keenness to avoid sudden losses, which they incurred over the past two years.
“I believe midyear results, which have started to come out, will provide investors with clues as to the direction of markets in the coming months,” an Amman-based portfolio manager told Arab News.
“The huge surplus of petrodollars accruing to the Gulf Cooperation Council member countries will continue to spur regional bourses, but speculation and lack of confidence remain problematic issues to be reckoned with,” he said.
Jordanian shares were steady last week as investors monitored the semi-annual results of listed firms.
The all share price index of the Amman Stock Exchange closed marginally higher at 5,780 points compared with previous week’s close at 5,775 points, according to the ASE weekly report.
Kuwaiti shares surged for the fifth week in a row deriving momentum from investors’ expectations of good corporate profits in the first two quarters of the year.
The KSE all share price index gained 1.3 percent last week, closing at 12,361 points up from 12,207 points last week.
The unified all share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi rose 1 percent last week, closing at 4,644 points from 4,600 points previous week.
Egypt’s CASE 30 index, measuring the performance of the most active 30 stocks, gained 2.2 percent last week, closing at 8,345.7 points compared with previous week’s close at 8,167.7 points.
The GulfBase GCC Index rose 2.15 percent to 5,421.85 points last week. The value of GCC traded shares jumped 37.20 percent to $17.31 billion and volume by 13.42 percent to 5.59 billion last week.
