JEDDAH: The Saudi stock market performed well in the first half of this year. The Tadawul All-Share Index (TASI) closed at 9,352.32 points at the end of first half of 2008, up 2,378.75 points or 34.11 percent compared to the same period of the previous year.
The index closed at the highest level of 11,697.01 points on Jan. 12.
Total equity market capitalization at the end of 1st half reached SR1.77 trillion ($473.21 billion), increasing by 59.49 percent over the end of the 1st half of 2007, according to the Saudi Stock Exchange (Tadawul) statistical report for first half of this year. The total value of shares traded dropped 13.54 percent to SR1,286.87 billion ($343.17 billion).
The total number of shares traded declined 3.88 percent to 33.48 billion shares compared to 34.83 billion shares traded during the same period of 2007.
The total number of transactions executed fell 19.77 percent to 31.25 million compared to 38.95 million trades for the 1st half of 2007.
“Even if we account for January’s drop, TASI’s half year performance has been growing at a healthy pace compared to the third quarter of 2007,” Dr. John Sfakianakis, chief economist of SABB (The Saudi British Bank), said, adding that “the market’s steep rise in Q4 of 2007 did lead many to anticipate the steep rise to continue way into 2008. A steep rise can lead to steep falls and this is what happened in January 2008.”
There were five new listings on the bourse during the first half.
Saudi Re for Cooperative Reinsurance Co., with a paid up capital of SR1 billion divided into 100 million shares, was listed on May 24. The company offered 40 million shares at a nominal value of SR10 per share.
Mohammad Al-Mojil Group Co., with a paid up capital of SR1 billion divided into 100 million shares, was listed on May 26. The company offered 30 million shares at SR70 per share.
Alinma Bank, with a paid up capital of SR15 billion divided into 1,500 million shares, was listed on June 3. The company offered 1,050 million shares at a nominal value of SR10 per share.
Basic Chemical Industries Co. (BCI), with a paid up capital of SR220 million divided into 22 million shares, was listed on June 16. The company offered 6.60 million shares at a nominal value of SR30 per share.
United Cooperative Assurance Co. (UCA), with a paid up capital of SR200 million divided into 20 million shares, was listed on June 21. The company offered 8 million shares at a nominal value of SR10 per share.
In the first half of this year 10 companies launched their initial public offerings (IPOs).
Rabigh Refining and Petrochemical Co. offered 219 million shares at SR21 per share, Mobile Telecommunication Company Saudi Arabia offered 700 million shares at SR10 per share, Bupa Arabia for Cooperative Insurance offered 16 million shares at SR10 per share, United Cooperative Assurance Co. offered 8 million shares at SR10 per share, Saudi Re for Cooperative Reinsurance Company offered 40 million shares at SR10 per share, Alinma Bank offered 1.05 billion shares at SR10 per share, Mohammad Al-Mojil Group Co. offered 30 million shares at SR70 per share, BCI offered 6.6 million shares at SR30 per share, Abdullah Al-Othaim Markets Co. offered 6.75 million shares at SR40 per share, and Halwani Bros Co. offered 8,571,430 shares at SR20 per share. The number of brokerage firms active in the market reached 23 at the end of first half. The Capital Market Authority (CMA) allowed Saudi Pioneers Securities and Watan Investment and Securities to provide financial brokerage services.
Sfakianakis said “although the TASI has traded between 9,000 to 10,000 for most of the first half, global equity markets have taken serious beatings.”
He added “half-year earnings growth should be strong for the construction sector despite rising costs and delays. Cement companies should see healthy expansion on the back of the construction boom.”
Sfakianakis added “in terms of valuations, the Saudi market is more expensive compared to global and regional markets but earnings growth potential for Saudi listed companies is strong. Finally, the first half of the year was not easy for many corporates as it was truly the first year that began witnessing a precipitous rise in prices across the wide spectrum of the economy.”
The Saudi stock index surged 104.89 points or 1.12 percent to 9,483.23 yesterday. Over SR7.78 billion worth of shares changed hands yesterday.
