5 Interactive Distance Learning Programs on Islamic Banking and Finance

Saturday, July 4, 2009

Investors keep eye on corporate results

Saudi shares were volatile last week as the financial sector was negatively affected by hardships facing certain Saudi family businesses, mainly Saad Group and Ahmad Hamad Al-Gosaibi & Brothers Co. (AHAB).

The Tadawul All-Share Index (TASI) shed 0.2 percent last week, closing at 5,599.38 points. TASI is currently 16.6 percent higher than the year’s start, according to the Riyadh-based Bakheet Investment Group’s (BIG) weekly report.

The report expected the Saudi exchange to respond to the quarterly results of listed firms, particularly banks and the Saudi Arabian Basic Industries Corp. (SABIC). SABIC shares dropped 5.30 percent last week to SR62.50.

Some insurance companies made solid gains last week. SABB Takaful shares jumped by 41.03 percent to SR110, Saudi Fransi Cooperative Insurance Co. by 30.04 percent to SR88.75, Alahli Takaful Co. by 24.32 percent to SR181.50 and Saudi Arabian Cooperative Insurance Co. by 12.99 percent to SR65.25.

The Saudi stock market turnover fell last week to nearly SR24 billion compared to SR30.9 billion in the previous week.

Shares in National Agriculture Marketing Co. plunged 13.64 percent to SR38 last week.

Uncertainty prevailed in most Arab stock markets last week as investors awaited the release of second quarter corporate results, which they believed would decide the course of regional markets in the coming stage, financial analysts said yesterday. “We think Arab markets will continue to be without direction in the coming few weeks as investors monitor the publication of balance sheets of listed firms to decide their positions for the coming stage,” an Amman-based portfolio manager said.

“I believe regional markets will also be affected by the movement of oil prices and the indicators released about the performance of the world’s recession-hit major economies that are supposed to provide clues for a way out of the current chaos,” he said.

The Amman Stock Exchange (ASE) was also the scene of violent fluctuations last week due to what analysts described as waves of speculation and varying levels of liquidity that played havoc with prices.

The all-share price index gained 0.95 percent last week, closing at 2,742 points, led by the mining sector and the Arab Bank, the ASE weekly report said.

Blue chip shares recovered in the last two days of the week after the Arab Bank management assured its shareholders that its financial position was unaffected by the hundreds of millions of dollars it had extended as long-term loans to two troubled Saudi business groups.

Kuwait’s KSE all-share index fell 0.4 percent closing week at 8,108 points, against speculation that Kuwaiti stocks were set to rebound after the Interior Minister Sheikh Jaber Khalid Al-Sabah survived a parliamentary no-confidence vote.

The performance of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi was mixed. Dubai’s all-share price index lost 2 percent last week closing at 1,821 points, while Abu Dhabi’s benchmark price gained 1.6 percent to close at 2,671 points.

The Dubai bourse was negatively affected by reports that UAE banks extended loans amounting to $3 billion to troubled Saad and Al-Gosaibi groups.

Egyptian shares behaved differently from other Arab stocks due to strong gains scored by blue chips, analysts said.

Egypt’s AGX30 index, measuring the performance of the market’s 30 most active stocks, climbed 8.9 percent last week closing at 5,965 points.

The GulfBase GCC Index increased slightly to 3,642.45 points last week. The value of GCC traded shares fell by 24.73 percent to $9.68 billion and volume declined by 17.13 percent to 6.15 billion of shares.


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