JEDDAH/AMMAN: Saudi stocks surged at the outset of the week on Saturday but faltered later in the week in response to declines on Wall Street and fluctuating oil prices.
The Tadawul All-Share Index (TASI) gained 0.83 percent last week, closing again below the psychological barrier of 6,000 points at 5,990.30 points. TASI is currently 24.7 percent higher than the year’s start.
Riyadh-based Bakheet Investment Group (BIG) said in its weekly market report that the petrochemical and banking sectors and the corporate results for the second quarter will be the key movers of the Saudi market in the coming few weeks.
The stock market turnover was over SR36.68 billion last week.
The Capital Market Authority (CMA) announced last week that the listing and trading of Weqaya for the Takaful insurance and reinsurance company will start today within the insurance sector with an unrestricted price limit for the first day of trading only.
In continuance with its efforts to develop and support investors in the capital markets, CMA authorized Saudi Venture Capital Investment Company on Tuesday to conduct the securities businesses activities of managing, arranging, advising and custody.
Abdullah Al-Othaim Markets Co. was the top gainer last week as its shares jumped 32.58 percent to SR61.25, while Halwani Bros. was the main loser as its shares dropped 8.11 percent to SR37.40.
Meanwhile, the Jeddah-based BMG Financial Group issued a “Neutral” recommendation for Mobile Telecommunications Company Saudi Arabia (Zain KSA) in its latest report about the Kingdom’s telecom sector. BMG estimated a target value per share of SR15.11, implying an upside potential of 20 percent. The Zain KSA stock closed last week at SR12.85.
Zain KSA marked an aggressive entry into the Saudi market, acquiring approximately three million subscribers by the end of first quarter of 2009; seven months after the launch of its operations in August 2008. “Capitalizing on Zain Group’s strong brand name and its innovative ability to offer value-added services, we expect Zain KSA’s strength in customer retention to continue. We expect the stronger competition to be between Etihad Etisalat (Mobily) and Zain KSA, since Saudi Telecom Co. (STC) has already lost a significant part of its market share following the entrance of Mobily as the second mobile operator and has been unable to regain any real footing in the market since then”, BMG said in its report.
Arab stock markets closed the week differently, as investors monitored the movement of crude prices and the performance of global markets. The second quarter results of listed firms expected to start coming out early in July, financial analysts said yesterday.
They contended that Arab bourses were still coming under the “illogical and psychological pressures” of world markets where speculation also appeared to play havoc with oil prices, a key mover of Arab stock markets.
“We don’t have real reasons for the retreat of most Arab stock markets this week,” Nizar Taher, chief of brokerage at the Jordan Ahli Bank, said.
“Regional markets are coming under illogical and psychological pressures from global markets, where fluctuations do take place in response to economic indicators trying to seek clues out of the recession,” he said.
Taher and other analysts expect Middle East markets to keep a close eye on crude prices and the second quarter results in the coming few weeks.
Jordanian shares lost fresh ground last week due to excessive profit-taking moves and the absence of foreign buying, Taher said.
The all-share price index of the Amman Stock Exchange shed 2.78 percent last week, closing at 2,829 points, according to the ASE weekly report.
Kuwait’s KSE all-share price index gained 0.4 percent to close at 8,312 points from 8,277 points in the previous week.
The United Arab Emirates stock exchanges of Dubai and Abu Dhabi plunged on Thursday due to strong profit-taking operations that followed weeks of gains, analysts said.
The benchmark prices of Dubai and Abu Dhabi declined 4 percent and 2.4 percent last week to close at 2,014 points and 2,798 points respectively.
Egypt’s AGX-30 index, measuring the performance of the market’s 30 most active stocks, shed 0.5 percent last week, closing at 6,163 points.
The GulfBase GCC Index closed 1.51 percent lower at 3,791.70 points last week. The value of GCC traded shares also fell 1.34 percent to $16.49 billion and volume declined 5.44 percent to 12.42 billion.
— With input from Abdul Jalil Mustafa
