(MENAFN - Arab News) Panic trading in the Saudi stock market prevailed over the past two trading days, wiping out part of the market's gains that reached 9 percent over the past three weeks and pushed the Tadawul All-Share Index (TASI) toward the 5,000-point level.
TASI shed 1.5 percent last week, closing at 4,773.78 points. The Saudi benchmark is currently 0.6 percent lower than the year's start.
"The panic, which started at the insurance and agricultural sectors, extended to blue-chips like Petro Rabigh (Rabigh Refining and Petrochemical Co.)," the Riyadh-based Bakheet Investment Group (BIG) said in its weekly report.
"Moreover, investors are still worry about the reported uncertainty engulfing the distribution channels of the recent US economic stimulus plan involving 787 billion," it added.
The BIG expected a spate of buying this week as investors make benefit from the low prices of Saudi stocks to rearrange their positions. However, the group cautioned that the high prices scored by small-cap shares over the past weeks could precipitate a "harsh correction."
Al-Ahsa Development Co. was the top gainer last week as its shares jumped by 25.6 percent to SR12.50, followed by The National Agriculture Development Co., up 9.70 percent to SR40.70, Allied Cooperative insurance Group by 9.14 percent to SR39.40, Saudi Arabian Cooperative Insurance Group by 8.57 percent to SR38 and Saudi Advanced Industries Co. by 8.37 percent to SR12.30.
The insurance sector was badly affected last week. Al-Sagr Cooperative insurance Co.'s shares plunged by 24.71 percent to SR25.60, Saudi IAIC Cooperative Insurance Co. by 19.65 percent to SR45.40 and Saudi Fransi Cooperative Insurance Co. by 14.29 percent to SR67.50.
The stock market turnover also dropped last week to SR24.42 billion compared to SR33.40 billion in the previous week.
Arab stock markets reflected mixed performance last week as investors, obsessed with global recession fears, resorted to speculative trading and hit-and-run tactics to avoid further losses, financial analysts said yesterday.
"Speculation and short-term transactions were the prevalent state of affairs this week as investors continued to come under pressure of bad news coming from world markets," an Amman-based portfolio manager told Deutsche Presse-Agentur (dpa).
"Liquidity shortages, falling oil prices and profit-taking moves also continued to put downward pressure on regional markets, particularly in the Gulf region," he said.
Jordanian shares continued their downward trend last week as the liquidity squeeze continued to bite, forcing investors to ignore the good results achieved by most of listed firms in 2008, analysts said.
The all-share price index of the Amman Stock Exchange lost 1.02 percent last week, closing at 2,676 points, according to the ASE weekly report.
Kuwait's KSE all-share price index gained 1.1 percent last week, closing at 6,688 points. The benchmark price of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi went up by 2 percent last week to close at 2,440 points.
The GulfBase GCC Index also dropped 1.53 percent to 2,912.56 points. The value of GCC traded shares plunged 22.28 percent to 8.77 billion but volume increased slightly by 0.82 percent to 6.06 billion of shares.
The BMG Saudi Index, which comprises the top 30 active companies in Saudi Arabia based on their market capitalization after removing government ownership, witnessed a fall of 2.6 percent over the week. The index lost 6.24 points to close at 230.82. The total market turnover for the week also depreciated by 27.9 percent to SR13 billion versus SR18 billion registered in the previous week.
The number of shares traded over the week depreciated by 29 percent to 662.87 million shares compared to 933.4 million shares in the previous week. The average price-earnings (P/E) ratio for 2007's earnings was 10.28 times, while the price-to-book ratio (P/BV) was 2.48 times.