Performance of Saudi Stock Market in 2003

RIYADH, 7 January 2004 — The year 2003 was a remarkable period for Saudi stock market, says the Consulting Center for Finance & Investment in its recent report. The market represented by CCFI All Share Index closed at 339.96 thereby reporting a stupendous return of 78.7 percent for the year, one of the highest in its history. The market touched its historic high of 347.72 on Sept. 11, 2003 before retreating owing to profit-taking.

The year started with moderate gain due to the uncertainty that prevailed due to US threat of attack on Iraq, however, with the war starting later than expected (end of March) and lasted for a shorter duration period, led to a positive reaction from the market. The second and third quarter movements were backed by excellent financial performance reported by the companies coupled with higher liquidity. The final quarter witnessed some profit booking but the announcement of good prospects and dividends by certain banks and industrial companies encouraged the players in the fag end of the year. The quarterly returns during 2003 were 11.25 percent, 30 percent, 18.4 percent and 4.32 percent respectively.

The financial performance of the companies listed in the market has been relatively good this year, which energized the market. The year on year (YOY) growth of first quarter, first half and nine-month consolidated income for the market was 68.27 percent, 72.3 percent and 49.75 percent respectively. This growth was reflected as well in the stocks performance. The two sectors each represented by a single stock i.e. electricity and telecommunication led the market with increase in gains of 150.41 percent and 148.68 percent respectively for the year.

Stock-wise statistics for the year too showed a similar bullish trend as 68 stocks gained while just 2 stocks lost. Except for the moderate performers - banking (33.23 percent) and cement (27.92 percent) sectors, all the sectors reported one of their historically best performances.

The first public issue of STC has attracted millions of investors into the market. This had incited trading across the segments as 5.57 billion shares changed hands leading to a turnover of SR596.5 billion. The turnover ratio in 2003 was 101 percent much higher than 47.5 percent reported for the last year.

Active sectors during 2003 included Industrial sector that contributed 29 percent of the market turnover followed by service sector with 25 percent of the market turnover. Telecom and electricity were also active with turnover proportion of 18 percent each. Banking sector that still has the largest share (29.9 percent) in terms of market capitalization generated just 6 percent of the turnover. Cement sector was the only sector that witnessed drop in activity compared to 2002 as the turnover fell 20 percent. While the overall market turnover grew by more than 3 times the electricity, industry, services and agriculture sector turnovers jumped by about eight, four, three and two times respectively.

As regards to individual stocks three stocks SEC, STC and SABIC on aggregate contributed 47 percent or SR280 billion. In terms of number of shares Livestock followed SEC (1.27 billion shares) as 815 million shares changed hands.

As stated above the market was filled with gainers for the year. Gainers was led by Themar that returned 387 percent, followed by National Industrialization Company (NIC) with a gain of 296 percent. Except for Makkah Construction all the gainers returned in double or triple digits, 22 stocks returned more than 100 percent during the year and 18 stocks gained in the range of 50 percent-100 percent. Ahmed Fitaihi Company and Saudi Chemical were the only losers during the year with losses of 10.7 percent and 18.6 percent respectively.