(MENAFN - Arab News) JEDDAH, 9 September 2007 — After plunging 4.54 percent last, the Saudi stock market rebounded yesterday. The Tadawul All-Share Index (TASI) surged 123.44 points or 1.57 percent yesterday. Out of 103 stocks traded, shares of 88 companies increased while only 8 companies were in negative territory. The stock market turnover reached SR8.26 billion yesterday.
In the banking sector, shares of The Saudi Investment Bank and SABB declined yesterday. Al-Rajhi Bank shares gained 2.95 percent to SR87.25, Riyad Bank by 1.59 percent to SR64 and Bank Albilad by 1.57 percent to SR32.25.
Shares of four companies in the industrial sector fell. The losers were Saudi Ceramic Co., Saudia Dairy & Foodstuff Co., Almarai Co. and Advanced Polypropylene Company.
Shares in Saudi Basic Industries Corp. (SABIC) edged higher by 2.18 percent to SR129 yesterday.
Shares of cement companies were in positive territory.
In the services sector, shares of Tihama Advertising & Public Relations Co. fell 1.55 percent to SR47.75 yesterday.
Shares of Saudi Telecom Co. (STC) and Etihad Etisalat increased by 1.12 percent to SR67.75 and 0.76 percent to SR66, respectively.
The insurance companies made strong recovery yesterday after falling in the previous week. Shares of Alahli Takaful Co. jumped 9.95 percent to SR212.75, Saudi United Cooperative Co. (Wala Insurance) by 9.86 percent to SR78, Arabian Shield Cooperative Insurance Co. by 9.77 percent to SR73 and Sanad Insurance & Reinsurance Cooperative Co. by 9.74 percent to SR73.75.
The insurance index rose 5.30 percent to 2,539.88 points yesterday.
Shares of Tabuk Agriculture were down slightly at SR74 yesterday.
The Dubai-based Rasmala said in its August Middle East Market Overview that the Saudi market traded in positive territory throughout the month of August, extending its July rally to post gains of over 9 percent for the second consecutive month with a 4 percent gain for the year. In light of the traditionally slow summer period, trading volumes were moderate but reasonable.
The Saudi stock market is now trading at around 16.75 times earnings, reestablishing its premium over regional peers as the recent strong performance removed some of the undervaluation that was prevalent throughout the past six months. In addition, indications of corporate profit growth of around 3 percent in the first-half of 2007 over the same period last year did not compare well with regional markets, but favorable momentum and high levels of liquidity will continue to make this market attractive in the medium-term.
The report said Dubai Financial Market witnessed a large increase in trading volume of around 20 percent, ending the highly volatile month of August with a marginal loss. Emaar Properties was once again in the spotlight following its disclosures of its US operations, having been negatively impacted by the US subprime mortgage crisis. This combined with the global market panic, erased 8 percent from the DFM over six trading days, and Emaar traded at it lowest levels in two years, with many other stocks trading sharply lower as negative sentiment took over.
The announcement regarding the cancellation of Emaar's land-share swap deal with Dubai Holdings resulted in a sharp market recovery from oversold positions to end the month with only a marginal loss. The market is currently trading just over 12 times earnings, which is a heavy discount from its emerging market peers, thus making it an attractive investment venue for regional and global investors.
The Abu Dhabi market followed Dubai and traded in a narrow range at the beginning of the month, before plunging lower in the middle of the month as it succumbed to the spill-over from the global market crisis, before recovering toward the end of the month with a loss of 1.25 percent.
The Kuwaiti market continued its march ahead with gains of just over 1 percent in August. Its seventh positive month in a row now takes its year-to-date gains to 26 percent.
The Rasmala report said the Qatari market broke its four-month winning streak ending the month with a marginal loss of under 2 percent. Trading activity was substantially lower with volumes reduced by more than 50 percent. Qatar has nevertheless recovered very well from its oversold position earlier in the year, and is now showing a year-to-date return of around 5 percent.