JEDDAH/AMMAN, 2 February 2008 — Saudi shares showed wide volatility last week in response to internal and external pressures that affected investors’ confidence over the past two weeks.
The Tadawul All-Share Index (TASI) gained 3.4 percent last week, closing at 9,675.02 points from 9,360.44 points previous week.
TASI is currently 13.4 percent lower than the year’s start.
The Riyadh-based Bakheet Investment Group (BIG) said in its weekly report that the decline in the prices of Saudi shares will have “a positive impact in terms of the attractiveness” particularly of blue chip stocks.
“We expect the Saudi stock market to be rather steady during this week, waiting for any fresh news about the international economy, particularly the US economy,” the group said.
However, it stressed the “low correlation” between Saudi Arabia and the US economic developments as well as the “strong economic foundations of the Saudi economy” which it said should shore up the confidence of investors.
Shares of the newly listed Rabigh Refining and Petrochemical Co. jumped 158.33 percent to SR54.25. Petro Rabigh was most active by value also as shares worth SR32.53 billion changed hands last week.
Fawaz Abdulaziz Al-Hokair company’s shares increased by 18.14 percent to SR60.25, and that of Zamil Industrial by 16.94 percent to SR88 whereas shares of the Sahara Petrochemical rose by 13.16 percent to SR43.
Shares of the Saudi International Petrochemical Co. dropped by 18.32 percent to SR41.25 last week.
The value of traded shares reached SR78.54 billion last week.
Arab stock markets ended week in a “consolidation phase” after historical plunges over the past 10 days apparently in tandem with a panic-selling wave that rocked world markets on US recession fears, financial analysts said yesterday.
“I believe regional bourses are in a consolidation phase prior to fresh rebounds after the Fed in the United States slashed basic interest rates twice over the past week to spur growth,” an Amman-based portfolio manager told Arab News.
“I think the plummeting of Arab stocks was mostly unjustified in terms of fundamentals, and investors appeared to have reacted under psychological pressures,” he said.
He expected the decisions taken by regional central banks to trim interest rates in response to the Fed’s move “will have a positive impact on regional stocks.”
Jordanian shares rebounded last week, buoyed by the heavyweight Arab Bank’s declaration of record profits for 2007.
The all-share price index of the Amman Stock Exchange gained 2 percent last week, closing at 7,824 points from 7,671 points previous week, according to the ASE weekly report.
The Jordanian stock market was closed on Wednesday and Thursday because of a snowstorm that has blanketed the region. However, trading will resume today as a compensation move.
Kuwait’s KSE all-share price index climbed 1.8 percent last week, to close at 13,499.7 points compared with previous week’s close at 13,260 points.
The United Arab Emirates shares also rebounded last week, propelled by blue chip firms.
The benchmark of the UAE stock exchanges of Dubai and Abu Dhabi closed week on Thursday up 1.4 percent at 5,833 points from 5,602 points previous week.
The GulfBase GCC Index increased slightly to 6,613.26 points last week. The value of GCC traded shares, however, declined by 9.27 percent to $29.18 billion and volume fell by 28.75 percent to 6.96 billion of shares.
BMG Saudi Index Increases by 3.2 Percent
The BMG Saudi Index reversed its performance last week, as it witnessed a week-on-week increase by 3.2 percent, closing at 520.4 points in Wednesday’s session.
The total weekly turnover, however, declined by 7.3 percent, to reach SR27.9 billion ($7.4 billion), down from SR30.1 billion ($8.0 billion), registered in the previous week. The average P/E ratio for 2006 earnings was 23.66 times, whereas the price-to-book ratio was 4.43 times.
The sectors of the index followed the index’s uptrend, except for the insurance sector, which declined by 4.1 percent to close at 769.9 points. The electricity sector experienced no change over the week and remained stagnant at 999.7 points. The telecom sector appreciated by 7.3 percent. The services sector came in second on the positive performers list, going up by 6.3 percent and was followed by the agricultural sector, advancing by 3 percent. The banking and industrial sectors went up by close percentages, 2.8 percent and 2.6 percent, respectively. Moving to the turnover achieved by each sector, the industrial sector contributed with the biggest share to the total market turnover by 59.4 percent, recording a turnover of SR16.6 billion ($4.4 billion). The services sector came in second, with a share of 19.9 percent. The banking sector followed, with 7.8 percent, whereas the insurance sector contributed by 7 percent. The electricity, agricultural, and telecom sectors contributed by 2.1 percent, 2 percent, and 1.9 percent, respectively.
Regarding the Beta coefficient for each sector, the services sector recorded 1.06 points, whilst the agricultural sector attained 1.02 points. The Beta coefficient reached 1.0 by the industrial sector, 0.98 by the telecom sector, 0.94 by the banking sector, 0.75 by the electricity sector, and, 0.19 by the insurance sector.
