JEDDAH/AMMAN: Arab stock markets are expected to score fresh gains on what financial analysts described yesterday as good corporate results for the first half of the year and adamantly surging oil prices.
“I think regional stocks stand to gain from half-year results, which are expected to go out early in July, and from soaring crude prices,” Wajdi Makhamreh, chief operating officer at the Amman-based Sanabel International Holding, told Arab News. “We believe that Arab markets will also benefit from any improvement in the geopolitical situation and from positive moves in the US economy away from recession,” he said.
Stock exchanges of Saudi Arabia, Jordan and Kuwait extended gains last week apparently responding to leaks of better-than-expected results for the first six months.
The Tadawul All-Share Index (TASI) gained 0.93 percent last week, closing at 9,778.48 points from 9,688.45 points previous week. TASI is currently 11.4 percent lower than the year’s start.
The Riyadh-based Bakheet Investment Group (BIG) said recently that last week’s gains by the Arab world’s largest stock exchange was fueled mainly by the petrochemical sector.
Investors reacted to the positive news released by Petro-Rabigh, which recently announced its first contract to export Mono-Ethylene Glycol, it added. The soaring prices of petrochemical products also left their impact on investors’ decisions, the report said.
The BIG expected the Saudi market “to continue its gradual rebound reflecting the positive outlook for the second quarter results which will represent the driving engine for the market in the coming weeks.”
Shares in the newly listed Basic Chemical Industries Co. jumped 215 percent to close at SR94.50. Shares in Gulf Union Cooperative Insurance Co., Malath Cooperative Insurance and Reinsurance Co. and Al-Ahlia Insurance Co. also made hefty gains last week. The stock market turnover, however, fell last week to SR52.79 billion compared to SR64.71 billion in the previous week.
Meanwhile, the Capital Market Authority (CMA) granted a securities business license to Derayah Financial Corporation on Monday to conduct dealing as agent, managing, advising, and custody in the securities business.
The CMA also announced last week that the listing and trading of United Cooperative Assurance Company will begin today within the insurance sector.
The Calyon Saudi Fransi Bank, the financial adviser and underwriter of Halwani Brothers’ initial public offering (IPO), said the IPO for Halwani will commence today for nine days to conclude on June 30. The offering is intends to raise the company’s capital by 30 percent from SR200 million to SR285 million. The Jordanian shares also kept up their vigorous drive propelled by the strong gains of blue chip firms, mainly the Arab Potash Co., the Jordan Phosphate Mines Co. and the Jordan Petroleum Refinery.
The all-share price index of the Amman Stock Exchange climbed 4.64 percent last week to close at 5,044 points compared with previous week’s close at 4,820 points, according to the ASE weekly report.
Kuwait’s KSE all-share price index gained 1.6 percent last week closing at a record high of 15,552 points from 15,306 points previous week.
The benchmark of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 1.4 percent last week, closing at 6,154 points from 6,238 points previous week.
Egypt’s CASE-30 index, measuring the performance of the market’s 30 most active stocks, declined 3.6 percent due to profit-taking moves, to close at 10,306 points from 10,697 points. The GulfBase GCC Index fell slightly to 7,030.11 points last week. The value of GCC traded shares also declined 15.73 percent to $23.27 billion and volume decreased 16.57 percent to 6.40 billion of shares.
BMG index surges
The BMG Saudi Index continued the uptrend seen throughout the past four weeks, registering a 1.0 percent increase to close on Wednesday at 543.9 points. The market turnover also surged 8.5 percent to SR27.9 billion ($7.5 billion) as compared to SR25.8 billion ($6.9 billion) the previous week. Over 717 million shares were traded last week as compared to 639.2 million shares in the previous week, reflecting a 12.3 percent increase. The average price-earnings (P/E) ratio for 2007 earnings was 32.66 times, whereas the price-to-book (P/B) ratio was 4.99 times.
Three sectors went down throughout the past week, while four appreciated. The telecommunications, electricity, and banking sectors declined by 2.8 percent, 2.0 percent, and 1.1 percent, respectively.
The beta coefficient was 1.05 for the banking sector, 1.03 for the industrial sector, 0.99 for the services sector, and 0.92, 0.65, 0.64, and 0.28, for the agricultural, telecommunications, electricity, and insurance sectors, respectively. Twenty stocks appreciated week-on-week, whilst nine shares depreciated.
