JEDDAH/AMMAN, 29 March 2008 — Saudi shares appeared in a consolidation phase last week though the trading volume was the lowest since June 2006.
“This reflects the wait-and-see approach of investors who are eying the first quarter results,” said the weekly report of the Riyadh-based Bakheet Investment Group (BIG).
The Tadawul All-Share Index (TASI) was down 0.7 percent, closing week at 9,418.32 points from 9,488.85 points previous week.
TASI is currently 15.7 percent lower from the year’s start.
The stock market turnover, however, increased to SR38 billion last week compared to SR29.64 billion in the previous week.
“We expect the market to continue fluctuating within a small band awaiting the results of the first quarter, which will play a role in determining the direction of the market,” the BIG said.
The consultancy house expected the corporate results for the first quarter of 2008 to be “encouraging” and to “drive upward the investors’ confidence.”
Shares in the newly listed Mobile Telecommunications Company Saudi Arabia (Zain KSA) increased by 97.50 percent to SR19.75 last week. Over SR16.49 billion worth of Zain KSA shares changed hands. Saudi Telecom co. (STC) and Etihad Etisalat shares increased by 0.38 percent and 4.76 percent respectively.
Savola Group shares plunged 27.96 percent to SR33.50 last week.
In the banking sector, Al-Rajhi Bank shares remained unchanged at SR88 while shares in all other banks were in the red last week.
Middle East stock markets were volatile last week and financial analysts said yesterday they expected regional bourses to continue their cautious performance pending the release of first quarter results.
“I believe Arab markets will move sideways in the coming couple of weeks as investors await the publication of first quarter results to determine their new positions,” an Amman-based portfolio manager told Arab News.
“Most of regional bourses suffered recently as a result of plunges on world markets in response to US recession fears, but low prices of shares should provide a buy opportunity for investors,” he said.
“Regional stocks still stand to gain from soaring oil prices and the huge surplus petrodollars expected to accrue to Arab oil-producing countries,” he added. The Amman Stock Exchange was the scene for strong fluctuations last week with blue chips leading the trend in both directions.
The ASE all-share price index shed 2.89 percent, closing at 8,173 points compared with previous week’s close at 8,417 points, according to the market’s weekly report.
Kuwait’s KSE all-share price index declined 0.9 percent last week, to close at 14,333 points from 14,455 points previous week.
The all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 1.5 percent, closing at 5,796 points down from 5,886 points previous week.
Egypt’s CASE 30 benchmark, measuring the performance of the market’s 30 most active stocks, gained 1.9 percent, closing at 11,117 points from 10,905 points previous week.
BMG Saudi Index Turnover Falls by 38%
The BMG Saudi Index registered the fourth successive week-on-week decline in March 2008, losing 1.78 points to 516.97. The total turnover also fell by 38 percent to SR9.2 billion ($2.5 billion) versus SR14.9 billion ($4 billion) traded in the previous week. The average P/E ratio for 2006 earnings was 24.3 times, while the price-to-book ratio was 4.5 times.
The majority of the sectors recorded losses last week, with the exception of the telecommunications and industrial sectors, whose closing levels ascended by 0.4 percent and 0.1 percent, respectively. The agricultural sector was the biggest loser, with a 7.8 percent week-on-week loss, whereas the insurance, services, electricity, and the banking sectors going down by 3.3 percent, 2.7 percent, 1.8 percent, and 0.2 percent, respectively. With regard to the market turnover, the industrial sector acquired the biggest share, accounting for 56.5 percent of the total market turnover.
The beta coefficient for the sectors was 1.06 for the banking sector, 1.02 for the industrial sector, 1.01 for the services sector, and 0.95, 0.74, 0.66, and 0.29, for the agricultural, electricity, telecommunications, and insurance sectors, respectively.
Only two shares appreciated, whilst 25 shares declined last week. The worst performer was Tabuk Agriculture, going down by 12 percent to SR36.75 per share. The best performer in terms of price change and turnover attained during the week was Saudi Basic Industries Corp. (SABIC), one of the index’s leading shares, advancing by 1.3 percent to SR176.50, registering a turnover of almost 2.0 billion during the week. Saudi Kayan Petrochemicals maintained its record of the highest quantity of shares traded throughout the week, reaching 58.3 million shares.
