JEDDAH/AMMAN, 8 March 2008 — Saudi shares suffered from selling pressure last week with blue chip stocks leading the decline.
The Tadawul All-Share Index (TASI) shed 2.9 percent last week, closing at 9,984.58 points down from 10,291.47 points previous week.
TASI is currently 10.7 percent lower than the year’s start.
The weekly report of the Riyadh-based Bakheet Investment Group (BIG) attributed the decline to “selling pressure for profit taking on the majority of the listed stocks that took place despite the fact that some stock prices had reached attractive levels, particularly those of blue chips.”
“It seems that the market is still impacted by regional factors, including economic and political tension,” the report said.
It expected the market to find support from the country’s “economic indicators including rising oil prices.”
“We still hold an optimistic vision about the future earnings of the listed firms and their chances of growth, given the level of liquidity and capabilities available,” the BIG report said.
Shares in three insurance companies increased sharply last week. Saudi Fransi Cooperative Insurance Company shares jumped 13.90 percent to SR125, Sanad Insurance & Reinsurance Cooperative Co. by 6.25 percent, and Saudi Arabian Cooperative Insurance Co. by 5.51 percent to SR95.75.
Anaam International Holding Group Co. shares fell 18.83 percent to SR107.75. Shares in Saudi IAIC Cooperative Insurance Co. also dropped by 11.15 percent, Fawaz Abdulaziz Alhokair Company by 8.92 percent and Arab Cement by 8.81 percent. Saudi Basic Industries Corp. (SABIC) shares declined by 4.95 percent to SR177.75.
Shares in Saudi Telecom Co. (STC) and Etihad Estisalat fell by 2.73 percent and 1.86 percent respectively.
The stock market turnover last week was SR43 billion compared to SR57 billion in the previous week.
Caution and profit-taking moves prevailed at Arab stock markets last week, but financial analysts said yesterday they expected regional bourses to benefit from the soaring oil prices and surplus petrodollars due to accrue to Arab oil-producing countries this year.
“Profit-taking and caution dominated regional markets last week putting downward pressures on prices as attention of investors started to focus on the first quarter results,” an Amman-based portfolio manager told Arab News.
“However, we have genuine reasons to believe that the adamantly rising crude prices will boost equity markets which will remain a profitable investment outlet for surplus liquidity,” he said.
Jordanian shares were volatile last week as trading focused on blue chip firms, notably the Arab Potash Co., the Jordan Phosphates Mines Co. and the Jordan Petroleum Refinery.
The All-Share Price Index of the Amman Stock Exchange declined 1.13 percent, closing the week at 8,367 points compared with previous week’s close at 8,463 points, according to the ASE weekly report.
Kuwaiti shares were steady last week, buoyed by annual results, dividends and expectations of good profits in the first quarter of the year, analysts said.
The KSE All-Share Price Index gained 1.0 percent last week, to close at 14,157 points up from 14,010 points previous week.
The All-Share Price Index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 1.0 percent last week, closing at 6,125 points from 6,163 points.
Investors at the UAE markets were hesitant to take positions at this time of the year pending clues for the first quarter results, an analyst said.
Egyptian shares lost ground last week under profit-taking pressures mainly on the part of foreign investors.
Egypt’s CASE 30 index, measuring the performance of the 30 most active firms, closed the week at 11,389.9 points.
The GulfBase GCC index also fell slightly to 6,936.04 points. The value of GCC traded shares dropped by 14.56 percent to $18.64 billion and volume fell by 9.63 percent to 5.05 billion of shares.
BMG Saudi Index Turnover Drops by 25%
The BMG Saudi Index witnessed a week-on-week decrease by 3.6 percent to close on Wednesday’s session at 546.3 points. The total turnover dropped by 25 percent, to reach SR21.1 billion ($5.6 billion), versus SR28.2 billion ($7.5 billion) registered throughout the week. The average P/E ratio for 2006 earnings was 23.71 times, while the price-to-book ratio was 4.66 times.
All seven sectors underperformed last week. The electricity sector was the biggest loser, with an 8 percent fall in its number of points. The Industrial sector came in second with 4.5 percent decrease and was followed by the agricultural sector declining by 3.1 percent. Both the telecommunications and services sectors depreciated by 2.7 percent and the banking sector went down by 1.8 percent, whilst the Insurance sector maintained its downtrend for the third consecutive week, going down by 0.9 percent.
Four shares saw their closing prices appreciate week-on-week, whereas another four remained stagnant.
Saudi Kayan Petrochemical Co. maintained its record of the highest turnover and quantity of shares traded throughout the week, attaining SR5.4 billion traded over 207.0 million shares, with its share price descending by 2.8 percent to SR26.25 per share. Al-Rajhi Bank shares depreciated by 2.2 percent to SR99 per share.
