JEDDAH/AMMAN, 24 November 2007 — Saudi shares firmed last week for the fifth week in a row against the backdrop of corporate gains scored in the third quarter.
The Tadawul All-Share Index (TASI) gained 2.74 percent last week, closing at 9,518.87 points from 9,264.75 points previous week.
TASI is currently 20 percent higher than the year’s start.
According to the weekly report of the Riyadh-based Bakheet Investment Group (BIG) the market will witness a “profit-taking wave within a narrowed range while investors aim to reallocate their portfolios”.
It also warned that speculative stocks were “moving without investment basis relating to their profitability” and advised investors to be cautious in this respect. Last week, the Saudi Cabinet agreed for the creation of the Saudi Stock Market board of directors, which is a new advanced step toward Saudi stock market execution and monitoring.
The board will undertake the executive duties while the Capital Market Authority (CMA) will undertake the supervisory and regulatory duties.
The BIG report said the banking sector witnessed a robust performance as all stocks in this sector surged last week. The Tadawul Banking Index increased by 4 percent. Riyad Bank shares soared 9.36 percent, the highest increase among all banks last week. Baque Saudi Fransi shares jumped by 6.07 percent to SR83, Bank AlJazira by 5.49 percent to SR62.50 and Samba Financial Group by 5.34 percent to SR148.
Saudi Basic Industries Corp. (SABIC) shares fell by 1.19 percent to SR166 last week.
Arriyadh Development Co. was the top gainer last week as its shares surged 16 percent to SR21.75, Saudi Arabian Cooperative Insurance Company by 14.80 percent to SR128, Al-Babtain Power & Telecommunication Co. by 12.16 percent to SR83, Gulf Union Cooperative Insurance Co. by 12.12 percent to SR64.75 and Saudi International Petrochemical Co. by 11.29 percent to SR51.75.
Shares at Allied Cooperative Insurance Co. plunged 7.22 percent to SR109.25, Saudi Industrial Export Co. by 4.12 percent to SR75 and Saudi IAIC Cooperative Insurance Co. by 3.55 percent to SR115.50.
The stock market turnover also increased to SR50.63 billion last week compared to SR45.28 billion in the previous week.
Arab stock markets are expected to witness profit-taking intervals in the coming weeks prior to the release of the annual results early in January, analysts said yesterday.
“We believe that regional stocks could lose some ground in profit taking moves in the coming weeks in the wake of gains they clinched as a result of the relatively good third quarter results,” an Amman-based portfolio manager said.
“The soaring oil prices and the huge surplus petrodollars expected to accrue to Arab oil-rich states will certainly provide a catalyst to Arab bourses in the new year,” he added.
Jordanian shares, particularly the heavyweight Arab Bank made benefit last week from the results of the parliamentary elections and the appointment of technocrat Nader Dahabi as new prime minister.
The all-share price index of the Amman Stock Exchange gained 3.07 percent, closing at 7,003 points compared with previous week’s close at 6,795 points. Kuwait’s KSE all-share price index gained 1.00 percent last week, closing at 12,539 points from 12,484 points previous week. The all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 2.7 percent, closing at 5,463 points compared with previous week’s close at 5,612 points.
The GulfBase GCC Index also increased by 0.46 percent to SR6,361.51 last week. The value of GCC traded shares, however, declined by 4.80 percent to $22.82 billion and volume fell 35.32 percent to 7.24 billion shares.
BMG Saudi Index Maintains Positive Trend
Following its performance previous week, the BMG Saudi Index registered another positive performance last week, having advanced by 0.8 percent from its close last week to reach 525.8 points. Likewise, total weekly turnover reached SR20.6 billion ($5.5 billion), up by 7.8 percent from previous week’s turnover, and attained by investments in 520.5 million shares traded during the week. The average P/E ratio for 2006 earnings was 29.87 times, whereas the price to book ratio is 5.02 times.
All the index’s sectors registered gains in last week. The top performing sector was the services sector, which climbed week-on-week by 6.4 percent. The insurance sector followed, with 4.8 percent rise from last week, while the industrial sector grew by 3.9 percent and the agricultural sector improved marginally by 0.3 percent. In terms of the value of investments for each sector, the industrial sector’s shares registered SR9.3 billion ($2.5 billion), or 45 percent of the index’s turnover. Value of trades in the shares of the services sector reached SR4.5 billion ($1.2 billion), or 22 percent of total turnover. The agricultural sector’s portion was 18.2 percent of total investments in the Index, or SR3.8 billion ($1 billion), whilst the insurance sector’s was the least contributor in total turnover, with SR3.1 billion ($0.8 billion), equivalent to 14.8 percent of total index’s turnover. As for the “beta coefficient” for each sector, the agricultural sector had the highest beta value of 1.58, followed by the service sector whose beta was 1.39, and the industrial and the insurance sectors registered betas of 0.99 and 0.19, respectively.
The index’s shares performed well in this week, as 26 shares advanced and only one share stood still, while 3 shares saw losses week-on-week. The best performer for the second consecutive week was The Mediterranean & Gulf Insurance & Reinsurance Co. from the insurance sector, which climbed by 10.3 percent to SR58.75 per share. The share recording the highest weekly turnover, and highest number of shares traded during the week was, like last week, Saudi Kayan Petrochemical Co., with SR183.3 million traded over 3.4 billion shares to end the week second as the highest performer by 9.9 percent to SR19.5 per share.
