Sunday, 09 December 2007
By Adel Al-Malki
JEDDAH - The Saudi stock market finally broke through the psychologically-important 10,000-point barrier, ending days - even weeks - of speculation as to when the Tadawul Stock Index (TASI) will finally test a new support level. The TASI climbed as high as 10,179.11 midway through trading on Saturday before closing at 10,108.55, up 2.19 percent or 216.53 points, with about SR15.272 billion worth of shares changing hands. Losers however outnumbered gainers 60 to 38.
The banking sector index was up 3.91 percent to 26,707.23 points; industrial was 2.61 percent higher to 25,913.63; cement 1.32 percent up to 6,534.70; services gained lost 1.55 percent to 2,237.10; electrical was stable at 1,476.71; telecommunications hardly moved to 3,094.88; insurance shed 3.04 percent to 2,475.18 and agricultural dipped 1.91 percent to 4,234.68 points.
"The market finally overcame the psychological barrier after the collapse of the market in February last year," Asa'ad Jawhar, an economist and assistant professor at King Abdul Aziz University told Saudi Gazette.
Jawhar added the Gulf leaders' pledge for a common market launch next month likewise boosted the confidence of market investors bullish on prospects of smoother and broader liquidity flows.
"There have been large amounts of interest among Gulf investors [outside the Kingdom]... with the current market set-up and with the common market trading between Gulf stock markets will be facilitated," John Sfakianakis, chief economist with SABB, said in an interview.
"By all indications the day's run-up [to 10,000] is sustainable because of factor both here and abroad," Sfakianakis added.
Another factor for the bullish sentiment, according to stock analyst Salem Ba-Ajajah also of King Abdul Aziz University, were reports of a SR250 billion budget surplus by the end of the Kingdom's financial year.
The Kingdom is experiencing a windfall from high oil prices, which of late have hit record highs on the global market.
"Impressive corporate results likewise contributed to the day's rise," Ba-Ajajah said.
Among the day's gainers were SABB, which was up 8.19 percent to SR142; Arab National 7.94 percent higher to SR108.75; Al-Hokair which added 6.6 percent to SR56.50 and Saudi Fransi which padded 6.26 percent to SR93.25. Losing stocks meanwhile were Jabal Omar, which shed 7.21 percent to SR22.50; Saudi Indian which shed 6.66 percent to SR105; SAICO which lost 6.399 percent to SR150 and Almarai which retreated 5.95 percent to SR118.50.
Most actively traded were Jabal Omar with 98.243 million shares, Saudi Kayan with 40.697 million shares, MESC with 19.448 million and Emaar E.C. with 17.676 million shares. "If the market movers continue this run we might reach 10,300 before the Haj vacation... and a possible attempt at the 11,000 level after the vacation," Asa'ad commented.
Ba-Ajajah agreed, adding the index may even hit the 11,000 level even before the holiday with the way banking and industry stocks are trading right now.
Safakianakis meanwhile said that continued strong corporate results are luring investment funds into the market.
"We are seeing institutional inverts going into the market," he added.