(MENAFN - Arab News) Saudi Arabia will set up an investment firm, Sanabil Al-Saudia, as a joint stock company with a capital of SR20 billion that will invest in stocks, bonds, real estate, foreign currencies, minerals and commodities.
The new firm, which has been approved by the Cabinet, will also manage investment portfolios for other parties, the Saudi Press Agency said.
Despite this announcement, the Saudi stock market fell heavily following rout at the global equity markets yesterday.
The Tadawul All-Share Index (TASI) plunged 4.31 percent yesterday, making its sharpest single-day decline in almost 6 months after the stock market said it was introducing a new trading mechanism. The index closed 392.43 points down at 8,706.77.
Tadawul started technical experiments as part of its plan to implement trading unit values in collaboration with the brokerage companies and market data supplying agencies.
The move aims to reflect the changes occurring to the unit prices of stocks of listed companies in a better and effective manner.
Tadawul said in a statement put on its website that it also seeks to increase the liquidity and quantity of stocks in circulation.
The time of implementation of the new unit value would be announced after the completion of the technical trials.
Tadawul got wide support from investors and market specialists when it earlier announced the new plan.
It also put forward a system of three bands — five hallalas for shares with a value upto SR25, 10 hallalas for shares priced between SR25.10 to SR50 and 25 hallalas for shares priced at SR50.25 and above.
Out of 121 companies traded, shares of only three companies increased, while all other companies were in the red yesterday.
The stock market turnover, however, increased slightly over SR7 billion yesterday compared to SR6.92 billion on Monday.
The three gainers yesterday were Alabdullatif Industrial Investment Co., Saudi Hotels & Resort Areas Co. and Southern Province Cement Co.
Shares of Basic Chemical Industries Co. dropped by 10 percent to SR69.75, Saudi Fisheries Co. by 9.89 percent to 43.25, Bank AlJazira by 9.85 percent to SR32, SABB Takaful by 9.81 percent to SR59.75 and Bupa Arabia by 9.80 percent to SR23.
Shares of Abdullah Al-Othaim Markets Co., which started trading on Monday, also plunged 9.78 percent to SR62.25.
Saudi Basic Industries Corp. (SABIC) shares fell 2.60 percent to SR131. Zain KSA shares dropped by 7.77 percent, Etihad Etisalat by 4.52 percent and Saudi Telecom Co. by 2.54 percent.
BMG index slumps
The BMG Saudi Index landed on negative territory in yesterday's session, witnessing another successive decline, by a strong 3.9 percent, to reach a closing level of 477.12 points.
The market turnover, nevertheless, rose due to the high volume of shares sold to reach SR3.3 billion (873 billion), compared to SR2.1 billion (552 million), registered in Monday's trading session, indicating an increase by a significant 50.3 percent.
All of the sectors registered losses. The banking and industrial sectors fell by 2.0 percent and 3.7 percent, respectively, whilst the electricity, services and insurance sectors also went down by 4.2 percent, 6.4 percent, and 7.6 percent, respectively.
The telecommunications sector plunged by 7.8 percent, whereas the agricultural sector was hit by a strong 9.9 percent drop in its closing level.
All of the index's constituents depreciated.