JEDDAH: The Saudi stock market rebounded yesterday after falling 1.52 percent last week. The market was volatile last week due to turbulence at the global equity markets and expected results of the blue-chip Saudi companies.
The Tadawul All-Share Index (TASI) jumped 212.57 points or 2.4 percent on expectation of strong Saudi Basic Industries Corp. (SABIC) second quarter results. SABIC later said it made a net profit of SR7.54 billion in the three months to June 30 compared with SR6.47 billion in the second quarter of 2007. Its shares also surged 1.66 percent to SR137.25.
However, shares of Saudi Arabia Fertilizers Co. (SAFCO) fell 1.82 percent to SR137.25. Meanwhile, the Bahrain-based Securities & Investment Company (SICO) gave an “overweight” rating and set a fair value target price of SR289.30 for SAFCO shares.
The report said SAFCO’s plans to venture into steel manufacturing will provide a vehicle for long-term growth. SAFCO recently announced its plans to build a 1.7 million tons of flat products through a 50:50 joint venture with SABIC’s affiliate, HADEED. The plant is expected to be operational in the next four years.
Shares of Etihad Etisalat (Mobily) increased 2.10 percent as it announced second half net profits of SR774 million, up 40 percent over last year’s results of SR554 million.
Shares of Saudi Telecom Co. (STC) surged by 3.93 percent to SR59.50 and Zain KSA by 7.05 percent to 22.75.
In the insurance sector, Saudi Fransi Cooperative Insurance Company shares increased by 9.94 percent to SR96.75 and Tawuniya (The Saudi Company for Cooperative Insurance) by 9.77 percent to SR73.
Fawaz Abdulaziz Al-Hokair Co. shares edged higher by 9.39 percent to 40.75 as the Kuwait-based Global Investment House (Global) started coverage of the fashion retailer with a “buy” rating.
The value of Al-Hokair’s shares derived from the weighted average of the DCF (discounted cash flow) and peer comparison methods is SR52.92 per share. The stock currently trades slightly over SR40, which implies that the weighted average value of Al-Hokair’s shares is nearly 28 percent higher than the share’s current market price.
The return on average equity (RoAE) was 24 percent for 2007-08 as compared to 38.0 percent in the previous year. Similarly, the return on average assets (RoAA) was 18.3 percent for 2007-08 as compared to 28.7 percent in the previous year.
Net profit of Al-Hokair declined by 18.5 percent during the year 2007-08 to reach SR201.4 million, from SR247.3 million in the previous year. The net profit margin for the year 2007-08 was 12.7 percent, down from 16.7 percent in the previous year.
Savola Group shares increased 6.20 percent to SR34.25 as it said yesterday that it would invest SR6.5 billion by 2010 to expand after it said it would buy 80 percent of Pakistan’s third largest edible oil maker Agro Processors. Yesterday, 11 companies were down while 110 were in positive territory. Over SR9 billion worth of shares changed hands.
Meanwhile, Commerce and Industry Minister Abdullah Zainal Alireza yesterday approved the establishment of four Saudi joint stock companies with a total capital of SR262 million. They include Al-Ummah Research & Marketing Company with a capital of SR50 million.
The minister approved the transformation of Elaj Medical Services from a limited liability company to a closed joint stock company with a capital of SR160 million, the Saudi Press Agency said. Mubarak bin Zaid Al-Khaledi’s Sons and Emaar Al-Qura Construction Company are other firms approved by the minister, the agency said.
Fresh start
The BMG Saudi index increased 2.5 percent to 498.2 points yesterday. The market’s total turnover surged almost by two folds witnessing a strong 86.1 percent increase to SR5 billion ($1.3 billion), compared to SR2.7 billion ($719 million), registered in Wednesday’s trading session.
All sectors experienced gains yesterday, with the best performance achieved by the telecommunications sector which advanced by 7.0 percent. The agricultural sector followed by 3.5 percent, while the services sector went up by 2.9 percent. The insurance, banking, industrial, and electricity sectors stepped up by 2.6 percent, 2.3 percent, 2.2 percent, and 2.1 percent, respectively.
Twenty-six shares went up, whereas three ended in the red zone.
