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MENAFN - Arab News - 24/07/2007

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(MENAFN - Arab News) JEDDAH, 24 July 2007 — Shares in Saudi Fransi Cooperative Insurance Company (Allianz SF) made a hefty gain of 997.50 percent on the first day of trading on the Saudi stock market (Tadawul) yesterday. The SR10 Allianz SF shares opened at SR109.75 and stayed in that level at the closing.

The new insurance companies, most of them making a strong debut on Tadawul, raised concern among investors over the possibility of sustaining the momentum created by the initial enthusiasm among subscribers to insurance shares. According to one source, who asked not to be named, the cause of the apprehension stems from the recent stock market crash, which had similarly peaked before the bottom fell out.

Shares in another insurance company, Sanad Insurance & Reinsurance Cooperative Company, jumped 410 percent on debut on Saturday. Its shares rose 9.95 percent to SR52.50 yesterday.

SABB Takaful shares rose 497.50 percent on first day of trading on June 16. Since then its shares have made handsome gains. However, the Saudi Capital Market Authority (CMA), stock market regulator, said in a statement which appeared on the Tadawul website that it did not find any information or development that justified a surge in the price of the SABB Takaful shares and which the shareholders should have been concerned about. The CMA made the inquiries following its observation of the rise in the price of the company shares.

SABB Takaful shares, however, fell 4.65 percent to SR169.25 yesterday. Its shares jumped 9.91 percent on Sunday and 9.86 percent on Saturday.

Shares in other newly listed insurance companies also made solid gains yesterday. Malath Cooperative Insurance and Reinsurance Company shares rose 9.58 percent, Saudi United Cooperative Insurance Company 6.82 percent, Saudi IAIC Cooperative Insurance Co. 5.79 percent, the Mediterranean & Gulf Insurance & Reinsurance Co. 4.50 percent and Arabian Shield Cooperative Insurance Co. 4.30 percent.

Meanwhile, the Ministry of Commerce and Industry has issued a license to establish a new joint stock insurance company. The Saudi-Indian Cooperative Insurance Company is being founded with a capital of SR100 million constituting 10 million shares priced at SR10 each. The company founders will hold 6 million shares which is 60 percent of the total shares at the nominal value of SR60 million while the initial price offering (IPO) of the remaining shares will be launched after getting the mandatory permission from the CMA. The company will have to abide by all the regulations governing the insurance and reinsurance services.

The company will constitute a nine-member board of directors, the Saudi Press Agency reported yesterday.

The insurance index yesterday closed 30.04 points higher at 1,599.77.

The Tadawul All-Share Index (TASI) edged higher by 44.77 points to close at 7,436.67 yesterday.

In the banking sector, shares in the Saudi Investment Bank and Arab National Bank declined, while all other banks were in positive territory.

Shares in Saudi Telecom Co. (STC) and Etihad Etisalat rose 1.19 percent and 1.32 percent, respectively.

Saudi Basic Industries Corp. shares rose 0.40 percent to SR126 yesterday after it received CMA approval on Sunday to increase the size of its sukuk (Islamic bond) up to SR8 billion from SR5 billion.

Out of 97 companies traded, shares in 65 companies rose while 16 companies were in the red yesterday.

The stock market turnover reached SR5.37 billion yesterday.


 






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