(MENAFN - Arab News) The return of speculations on the shares of small companies have driven up prices of insurance stocks in the Saudi bourse by 12 percent during transactions this week but analysts said it was a negative indication for the market.
The Tadawul All-Share Index (TASI) rose slightly to close at 4,794.56 points this week against 4,789.49 points last week, scoring just five points.
However, the total value of transactions declined by 3.5 percent to reach SR25.7 billion compared to SR28.3 billion last week.
Hisham Abu Jamie, head of investment at Bakheet Investment Group, said they had started noticing the return of speculations on the shares of insurance companies.
"This is a negative indication as the price of one insurance company's stock rose by 56 percent during this week."
The market also witnessed an increase in prices of cement companies by 4.5 percent and Abu Jamie attributed the increase to the dividends announced by these companies from profits of 2008.
Ibrahim Al-Alwan, executive vice president of Kasb Capital Group, said the increase in prices of cement stocks was due to speculations that these firms would be allowed by the government to resume exports.
"The Saudi stock market is currently witnessing a kind of recession with regard to the rise and fall of index. This will lead to speculations on the stocks of small firms like insurance companies."
Four insurance companies topped the list of firms whose prices went up this week, especially the stocks of Saudi Fransi Cooperative Insurance Co., which rose by 56.90 percent, followed by Al-Sagr Cooperative Insurance Co. 41.3 percent, SABB Takaful 38.7 percent and Al-Ahlia Insurance Co. 34 percent.
Al-Alwan said the Saudi stock market would be linked with two basic factors: Oil prices and world market condition. "The future of the stocks of some Saudi companies would be determined by world market situation," he pointed out.