(Menafn-Arab News) JEDDAH, 14 January 2007 — The Saudi Capital Market Authority (CMA) yesterday suspended the exchange of shares of Bishah Agriculture Development Company (BADC) as a result of financial losses incurred by the firm last year. According to the third quarter results issued by the company, losses amounted to SR22.3 million.
"The losses, accounting for a big share of the company's capital, will drastically affect its financial condition," the CMA said, adding that the suspension would continue until the problems had been solved.
The authority earlier asked the company to issue a revised financial statement for the first nine months of last year. The company issued the amended financial statement on Jan. 10, 2007, which showed a net loss of SR22.3 million by the end of Sept. 30, 2006.
Khan H. Zahid, chief economist and vice president of Riyad Bank, told Arab News these kinds of decisions have to be made. "Companies which are not transparent need to be put on notice. They simply cannot continue like that," he said. "What the CMA has done is commendable," he said. "Any public company has to earn shareholders' trust."
Bishah shares fluctuated heavily last week. Its shares fell 10 percent, the maximum limit, on Wednesday to SR69.75 after rising 7.69 percent to SR70 on Jan. 6. Bishah shares were trading at SR65.25 on Dec. 27, 2006, the last day of trading in that year.
The Saudi stock market, meanwhile, dropped sharply yesterday. The Tadawul All-Share Index (TASI) plunged 348.12 points or 4.6 percent to close at 7,211.5. The index is expected to drop below 7,000 points this week. The market is already down 9.10 percent so far this year after dropping 52.53 percent last year.
Shares in all other agriculture companies also moved lower yesterday.
Qassim Agriculture Co. shares declined 3.45 percent to SR21 as the board of directors of the company urged its general assembly to approve proposals for increasing the company's capital from SR500 million to SR1 billion with 100 million shares. The move was taken to finance the company's strategic projects.
Saudi Fisheries Co. shares dropped 10 percent to SR99, Eastern Agriculture by 9.80 percent to SR57.50 and National Agricultural Development Co. by 9.78 percent to SR41.50. Out of 85 companies traded, shares of only three cement companies — Arab Cement, Yamamah Cement and Saudi Cement — were in the positive territory.
Over SR5.82 billion worth of shares changed hands yesterday.