Saudi share market capitalization reached SR1.75 trillion

The Saudi stock market in 2013 posted the strongest annual performance since 2009 with the Tadawul All-Share Index (TASI) up 25.5 percent.
According to the Tadawul Annual Statistical Report released on Wednesday, at the end of 2013, TASI closed at 8,535.60 points compared to 6,801.22 points for the previous year, thus gaining 1,734.38 points (25.50 percent). The highest close level for the index (TASI) during the year was 8,561.84 points as on Dec. 23.
Commenting on the Tadawul performance, John Sfakianakis, chief investment strategist at Masic in Saudi Arabia, told Arab News: “Many factors account for the rally, including high liquidity, confidence, good corporate profits, retail momentum as well as selective foreign institutional positioning.”
He added that the economy is on solid footing and 2014 will continue to be a year of high government spending, consumer growth and private sector expansion. “The catalysts for higher index growth are there absent of any global or regional surprises. However it's very difficult to predict how high the index will rise and how quickly and whether there will be significant pullbacks or minor adjustments,” Sfakianakis said.
“There is ample liquidity waiting on the sidelines and each time there is a small correction an upward direction gains strength,” he added.
“This is the highest annual increase since 2009, which was driven mainly by the petrochemical, banking and telecom sectors,” Basil Al-Ghalayini, CEO of BMG Financial Group, said.
“In 2014, not withstanding the effect of the geopolitical impact on traders' sentiments, I believe this growing trend may continue.,” he added.
“With more IPOs expected to be pumped into the Tadawul system in 2014, the market will enjoy a healthier trading environment. Furthermore, in the event the market opens directly to international institutional investors in 2014, we may witness higher trading volumes.” Al-Ghalayini said.
Fahad Alturki, head of research at Jadwa Investment, said: “Elevated oil prices, an expansionary fiscal budget, robust private nonoil sector performance and gains on global markets will keep sentiment positive in 2014.”
The report said total market capitalization at the end of 2013 reached SR1.75 trillion ($467.43 billion), increasing by 25.17 percent compared to the end of the previous year.
The total value of traded shares for 2013 reached SR1.37 trillion ($365.25 billion) compared to SR1.93 trillion ($514.49 billion) for the previous year, decreasing by 29.01 percent.
The total number of transactions executed during 2013 reached 28.97 million compared to 42.12 million trades for the previous year, decreasing by 31.20 percent.
The total number of shares traded for 2013 reached 52.50 billion compared to 83.28 billion shares traded during the previous year, decreasing by 36.96 percent.
The Jadwa Investment said in its report on Wednesday, 13 of the 15 sectors rose in 2013. Sectors oriented toward the local economy were the best performers, owing to sound local economic fundamentals, regional unrest and global economic uncertainty. Changes in labor market conditions continue to affect related sectors for the second consecutive month in December.
Farouk Miah, head of equity research at NCB Capital, said: “The main sector outperformers have been the hotel and retail sectors, which increased 123 percent and 55.8 percent respectively. The main underperformer was the insurance sector, which fell 11.3 percent. In terms of blue-chip stocks, SABB and Riyad Bank were the only stocks that outperformed the market.”
The Tadawul report said five companies offered parts of its shares to public (initial public offerings) during 2013. These companies represent cement, retail, insurance and building and construction sectors. At the end of the year, the total number of listed companies reached 163.
The total offered value reached SR1.96 billion and 134.25 million shares were offered for all IPOs during 2013.
At the end of 2013, the market capitalization of the listed IPOs companies reached SR12.81 billion that represent 0.73 percent of the total market capitalization, the report added.