JEDDAH/AMMAN — Saudi shares continued their volatile pattern last week with the Saudi Basic Industries Corp. (SABIC) leading the market in both directions.
The Tadawul All-Share Index (TASI) shed further 3.16 percent last week, closing at 9,185.07 points down from 9,484.41 points previous week.
TASI is currently 17.8 percent lower than the year’s start.
SABIC shares dropped 3.99 percent to SR156.25 last week.
According to the weekly report of the Riyadh-based Bakheet Investment Group (BIG), the Saudi stock market witnessed a slowdown amid trading value decreases to an average of SR8.8 billion daily, 30 percent lower than previous week.
The value of traded shares reached SR 44.2 billion, down against last week’s SR63.69 billion. Rabigh Refining and Petrochemical Co. (Petro Rabigh) dominated trading value at 17 percent followed by Saudi Kayan Petrochemical Co. at 13 percent and SABIC at 7 percent.
The BIG report expected Saudi stocks to recover “slowly” following the recent series of plunges as investors turn to blue chip shares, the prices of which have gone down tangibly.
Shares of Al-Sagr Company for Cooperative Insurance and Trade Insurance Cooperative Insurance Co., which made debut on Tadawul earlier last week, jumped by 335 percent to SR43.50 and 322.50 percent to SR42.25, respectively. Al-Ahli Takaful Co. shares also surged 14.16 percent to SR133 last week and Kingdom Holding Co. by 6.98 percent to SR11.50.
However, in the insurance sector, shares of Arabia Insurance Cooperative Co. fell by 24.81 percent, Saudi Arabian Cooperative Insurance Co. by 17.79 percent, Arabian Shield for Cooperative Insurance Co. by 11.76 percent and Gulf Insurance Union Co. by 10.50 percent to SR44.75.
Financial analysts said yesterday the Arab stock markets are expected to move sideways in the coming couple of weeks as speculation and selective trading dominate the behavior of investors.
“I believe regional markets will take sideways in the coming two weeks as investors resort to speculation tactics and selective trading pending the emergence of fresh moving factors,” said Mohammad Al-Sayyed, a senior analyst at the Amman-based AB Invest, the investment arm of the Arab Bank.
He told Arab News that some Arab bourses were still operating under the “psychological impact” of the plunges that occurred at global markets two weeks ago in response to US recession fears.
“Therefore, I think Arab markets will be rather quiet in the coming few weeks with most investors taking a wait-and-see approach before taking new positions,” he said.
Jordanian shares extended losses last week amid thin trading and shrinking liquidity which Al-Sayyed attributed mainly to receding activity by foreign investors.
The all-share price index of the Amman Stock Exchange declined 1.38 percent last week, closing at 7,748 points compared with previous week’s close at 7,857 points, according to the ASE weekly report.
Kuwait’s KSE all-share price index gained 26 points last week, closing at 13,712 points from 13,686 points previous week.
The all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi closed last week lower at 6,026 points from 6,052 points previous week.
Egypt’s CASE 30 index, which measures the performance of the market’s most active 30 firms, gained 1.0 percent last week, closing at 10,318 points from 10,213 points previous week.
The GulfBase GCC Index also fell 1.80 percent to 6,549.36 points last week. The value of GCC traded shares declined by 29.08 percent to $19.27 billion and volume decreased by 23.91 percent to 5.83 billion of shares.
BMG Index Continues to Show Downtrend
The BMG Saudi Index continued to lose more points over the week, declining in the first three trading sessions of the week, although it reversed the trend in Tuesday’s and Wednesday’s sessions. The index went down week-on-week by 2.9 percent, the same percentage drop the market witnessed last week, to close at 491.52 points. The total turnover also sharply declined by 14.6 percent to SR19.6 billion ($5.2 billion), down from SR22.9 billion ($6.1 billion) registered throughout the previous week. The average P/E ratio for 2006 earnings was 21.8 times, while the price-to-book ratio was 4.2 times.
Most of the sectors witnessed a downtrend over the last week, except the electricity sector, where there was no change in its closing level. The insurance sector was the worst performer, going down by 5.7 percent, while the telecommunications sector dipped by 4.1 percent. The closing levels of the industrial sector and the services sector descended by 3.6 percent and 2.7 percent, respectively, whereas the agricultural sector and the banking sector fell by 1.7 percent and 1.2 percent, respectively.
The industrial sector registered SR11.3 billion ($3 billion) turnover last week, 57.9 percent of the total turnover. The services sector recorded SR3.6 billion ($1 billion), almost 18.1 percent of the total market turnover, while the insurance sector accounted for 11.8 percent of total turnover, about SR2.3 billion.
The banking and electricity sectors’ contributions to total market turnover were 5.8 percent and 2.2 percent, respectively, while only 2.1 percent were accounted for by both the agricultural sector and the telecommunications sector.
Regarding the Beta coefficient for each sector, the services sector recorded 1.04 points, whilst the telecommunications sector attained 1.01 points.
