JEDDAH/AMMAN: Saudi stocks continued their downward trend last week led by the petrochemical and banking sectors.
The Tadawul All-Share Index (TASI) plummeted 7.67 percent last week, closing at 4,556.80 points from 4,935.33 points previous week.
The Riyadh-based Bakheet Investment Group (BIG) attributed the decline to “massive selling operations” that followed the publication of 2008 results of blue chip firms, particularly those of the petrochemical conglomerate the Saudi Basic Industries Corp. (SABIC). SABIC suffered a 95 percent decline in profits in the fourth quarter relative to the third quarter of 2008 due to falling prices of petrochemical products and a 50 percent drop in sales, the BIG said in its weekly report.
“Investors have already started to rearrange their positions by minimizing their exposure to stocks that were mostly affected by the financial crisis,” the report said.
“They hope to achieve high returns in the long run, awaiting the new plan of the new US administration to take its course and have its positive impact on markets,” it added.
On the other hand, as it was expected the majority of banks witnessed a drop in their profits in Q4, 2008 comparing it with Q3, while making provisions for investment losses which reflected the effect of the global financial markets by the financial crisis.
Etihad Etisalt was the top gainer last week as its shares jumped 12.37 percent to SR32.70. Basic Chemical Industries Co. shares surged by 12.07 percent to SR27.40 and Saudi Chemical Co. by 9.05 percent to SR25.90. Shares in Saudi United Cooperative Insurance Co. dropped by 32.41 percent to SR17.10 and Savola Group by 27.08 percent to SR17.50.
The stock market turnover was down to SR20.93 billion last week compared to SR25.70 billion in the previous week.
Other Arab stock markets suffered fresh setbacks last week under pressure of worsening performance of listed firms and bad news coming from global markets, financial analysts said yesterday.
They expected regional markets to remain cautious in the coming weeks pending the emergence of new factors that help to reverse the trend.
“I believe markets in the region will be volatile in the coming couple of weeks with investors awaiting the release of more annual results and the official adoption of the stimulus package by the new US administration of President Barack Obama,” an Amman-based portfolio manager said.
He expected oil prices, 2008 results and geopolitics to have a major impact on stock prices in the coming weeks.
“However, we think that the exceptionally low prices of regional stocks could trigger waves of buying by local and foreign funds if the climate of confidence improves at world markets,” he said.
Jordanian shares were volatile last week under pressure of decreasing liquidity and apparent decision by funds to remain on the sidelines awaiting fresh clues, analysts said.
The all-share price index of the Amman Stock Exchange shed 3.52 percent last week, to close at 2,677 points compared with previous week’s close at 2,775 points, according to the ASE weekly report.
Kuwait’s KSE all-share price index plunged 8.2 percent last week, closing at 6,497 points from 7,079 points previous week.
The benchmark of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi dived 12.5 percent last week, closing at 2,299 points from 2,626 points previous week. Egypt’s CASE-30, measuring the performance of the market’s 30 most active stocks, also plummeted 12 percent, to close week at 3,810 points compared with previous week’s close at 4,327 points.
The GulfBase GCC Index declined by 11.89 percent to 2,738.39 points. The value of GCC traded shares fell by 13.49 percent to $7.15 billion and volume dropped by 3.12 percent to 3.27 billion of shares.
Turnover declines
The BMG Saudi Index ended last week on a negative note. The index dropped by 22.15 points or 9.1 percent to 220.67 points. The total market turnover for the week fell by 6.9 percent to SR13.14 billion versus SR14.11 billion registered in the previous trading week. The number of shares traded over the week also declined by 12.5 percent from 804.20 million shares to 703.84 million shares this week. The average price-earnings (P/E) ratio for 2007’s earnings was 10.44 times, while the price-to-book ratio (P/BV) was 2.34 times.
— With input from Abdul Jalil Mustafa
