JEDDAH/AMMAN: Saudi shares fluctuated last week in thin trading in response to ups and downs at world markets and the sharp decline in oil prices.
The Tadawul All-Share Index (TASI) lost further 9.84 percent last week to close at 5,485.19 points. The index closed at 6,083.87 points in the previous week.
The decline was led by the petrochemical sector, notably the Saudi Basic Industries Corp. (SABIC), and the banking sector, analysts said.
SABIC shares declined 18.58 percent to SR60.25.
According to the Kuwait-based Global Investment House (Global), the petrochemical sector declined by 36 percent in October as the oil prices slid by more than 50 percent after reaching an all-time high of $145 per barrel in July.
TASI lost more than 50 percent since the beginning of the year.
The market capitalization, including the new listings, stood at SR1.11 trillion at Nov. 10, compared to SR1.95 trillion at the start of the year. The month of October turned out to be the worst with the market losing 25.2 percent of its capitalization, the Global report said.
The stock market turnover was SR24.90 billion last week.
The top gainer last week was Hail Agriculture as its shares jumped 14.60 percent to SR20.80.
Arab stock markets suffered heavy losses last week as lack of confidence deepened throughout the region on global recession fears.
The suspension of trading at the Kuwait stock exchange on Thursday appeared to send a negative message to other regional markets, financial analysts said yesterday.
“I believe the halting of trading at the Kuwaiti bourse by a judicial decision could aggravate the situation not only in Kuwait but also at other Gulf and Arab stock markets,” a portfolio manager said.
“I think the decision could turn out to be counterproductive and may have negative repercussions on the Kuwaiti and other regional markets when trading resumes this week,” he said.
The ruling by the administrative court to suspend trading at Kuwait’s stock exchange until Monday has drawn conflicting reactions inside and outside the emirate.
While small investors considered the ruling a “positive move” on the ground that it may stop the bleeding of their finances, others warned against the negative impact on the already deteriorating confidence of investors.
“The decision in itself could have negative repercussions, but the post-closure developments should be carefully discussed,” CEO of Kuwait’s Amwal International Investments said.
Kuwait’s KSE all-share price index plunged 10.2 percent last week before its closure at Thursday’s mid-session at 8,691 points.
In government’s latest bid to deal with the situation, the governor of the Central Bank of Kuwait, Salem Al-Sabah, disclosed the setting up of a fund for the purchase of assets of beleaguered investment firms, willing to sell such assets.
He said that the facility would be run by the state-owned Kuwait Investment Corporation (KIC).
Jordanian shares plummeted throughout the week’s trading sessions on fears of global recession.
The all-share price index of the Amman Stock Exchange plunged 12.03 percent last week, closing at 2,997 points, according to the ASE weekly report.
The benchmark of the United Arab Emirates stock exchange of Dubai dived 24.7 percent last week, closing at 2,106 points despite steps taken by the authorities to enhance liquidity.
Egypt’s CASE-30 index, which measures the performance of the market’s 30 most active stocks, shed 8 percent last week, closing at 4,823 points.
BMG index turnover
The BMG Saudi Index last week moved down by 11.7 percent or 36.4 points to 273.74. The total market turnover also went down by 40.3 percent to SR10.7 billion ($2.8 billion) versus SR17.9 billion ($4.8 billion) in the previous week, whereas the total number of shares traded descended by 40.9 percent from 688 million shares to 406.4 million shares last week.
The average price-earnings (P/E) ratio for 2007’s earnings was 11.6 times, while the price-to-book ratio (P/BV) was 2.6 times.
All sectors witnessed a negative performance week-on-week. Twenty-nine shares ended the week moving to lower closing prices, whereas only Makkah Construction and Development Co. stood still at SR27.50.
— With input from Abdul Jalil Mustafa
