JEDDAH/AMMAN, 10 May 2008 — Saudi shares slipped last week putting a halt to a series of gains that lasted for four weeks in what analysts described a profit-taking move.

The Tadawul All-Share Index (TASI) shed 2.9 percent last week, closing at 9,771.85 points from 10,066.16 points in the previous week. TASI is currently 11.5 percent lower than the year’s start.

A decision by the Saudi Monetary Agency to raise the ratio of required reserves that banks should deposit with SAMA apparently ignited worries on the part of investors that such a move could affect the ability of banks to expand their lending activity, according to the Riyadh-based Bakheet Investment Group (BIG).

In its weekly report, the BIG considered last week’s decline in prices of Saudi stocks “unjustified”, given the positive corporate results posted by listed firms.

The report expected “a gradual increase” in prices of Saudi shares in the light of the “positive factors surrounding the market in general”, a reference to the robust Saudi economy and surging crude prices.

The stock market turnover also dropped to SR42.91 billion last week as compared to SR51.90 billion in the previous week.

Savola Group was the top gainer last week as its shares jumped 14.71 percent to SR39.

The top loser last week was Fitaihi Holding Group. Its shares plunged 20 percent to SR23.

The retail subscription to the initial public offering (IPO) of Mohammad Al-Mojil Group (MMG) reached SR1.32 billion by the close of the fifth day of the offering. At the end of Wednesday, applications had been received from 1.24 million subscribers, which covered 210 percent of the initial allocation to the retail tranche of the IPO and 90 percent of the maximum allocation to the retail tranche of 21 million shares, according to HSBC Saudi Arabia Ltd., the financial adviser and lead manager for the Al-Mojil IPO.

Arab stock markets reflected mixed performance last week in the wake of the release of all first quarter results, and financial analysts said yesterday they expected regional bourses to remain steady in the light of soaring oil prices.

“I believe markets will remain steady in the coming weeks as investors monitor new moving factors after the publication of almost all quarterly results,” an Amman-based portfolio manager told Arab News.

“We expect speculation to be the dominant element in the coming few weeks and believe soaring oil prices will continue to have a positive impact on Middle East bourses at least in the medium and long terms,” he said.

Jordanian shares firmed last week, buoyed by the strong performance of blue chip firms, notably the Arab Bank, the Arab Potash Co., the Jordan Phosphate Mines Co. and the Jordan Petroleum Refinery.

“There is a strong demand on these strategic shares by foreign funds particularly from the Gulf region,” an analyst said.

The all-share price index of the Amman Stock Exchange climbed 6.15 percent last week, closing at 9,247 points compared with last week’s close at 8,712 points, according to the ASE weekly report.

Kuwait’s all-share price index gained 1.0 percent, closing week at 15,053 points from 14,755 points last week.

The GulfBase GCC Index fell by 0.54 percent to 6,979.30 points last week. The value of GCC traded shares also dropped 2.52 percent to $20.46 billion but volume increased by 36.35 percent to 7.44 billion of shares.

BMG Index Turnover Drops to SR13.6 Billion

The BMG Saudi Index reversed its performance of previous week in which it gained 4.93 points, ending the first week in May with a decline of 3.2 percent, losing 17.5 points, and reaching a closing level at 527.4 points. The market turnover fell by 20.5 percent to SR13.6 billion ($3.6 billion), compared to SR17.2 billion ($4.6 billion) in the previous week. A total of 343.8 million shares were traded last week, compared to 450.1 million shares in the previous week, a decline of 23.6 percent. The average price-earnings (P/E) ratio for last year’s earnings was 24.71 times, whereas the price-to-book (P/B) ratio was 4.02 times.

All sectors were down last week. The beta coefficient for the sectors was 1.03 for both the industrial and banking sectors, 1.00 for the services sector, and 0.91, 0.67, 0.65, and 0.29, for the agricultural, electricity, telecommunications, and insurance sectors, respectively.

Six stocks only appreciated week-on-week, whilst 23 shares depreciated.