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MENAFN - Arab News - 26/05/2009

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(MENAFN - Arab News) The Saudi stock market closed lower for the second successive session yesterday as shares in insurance companies plunged and blue chips retreated amid region-wide profit-taking.

The Tadawul All-Share Index (TASI) closed below 6,000 points after plunging 2.28 percent or 138.07 points at 5,914.23, its second straight decline since hitting a 30-week closing high on Saturday.

Almost all market sectors contributed to this loss, except the Media sector, which managed to close with a gain of 1.23 percent. Otherwise, sector losses ranged from a strong drop of 7.33 percent in the Insurance sector to 0.14 percent in the Real Estate development sector. Market breadth was strongly negative, with only 12 advancers to 108 decliners, giving an AD ratio of 0.11, the Jeddah-based Financial Transaction House (FTH) said in its market commentary.

"The TASI's drop of 2.28 percent is 'normal' and past due after the series of strong gains that pushed most of the listed companies to strong resistance levels that were difficult to overcome due to a lack of supportive news. Technically, TASI has violated the short-term trend line support that started on May 16, but has succeeded to close above the 20 days simple moving average of 5,887. We think a drop of this magnitude could have more down side potential," Faisal Alsayrafi, managing director and CEO of FTH, said.

Saudi Basic Industries Corp. (SABIC) dropped 2.96 percent, while banks tumbled, with Banque Saudi Fransi losing 4.76 percent, Samba Financial Group 4.65 percent and Arab National Bank shedding 3.54 percent.

The stock market turnover was over SR8 billion yesterday.

The insurance companies suffered badly yesterday as shares in all companies fell sharply except Al-Sagr Cooperative Insurance Co. as its shares increased 2.20 percent to SR51. Saudi IAIC Cooperative Insurance Co. and Gulf Union Cooperative Insurance Co. shares declined by 10 percent each to SR63 and SR26.10 respectively, while Saudi Indian Company for Cooperative Insurance Co. and Trade Union Cooperative Insurance Co. shares fell by 9.96 percent each and SABB Takaful by 9.91 percent.

Meanwhile, the Capital Market Authority (CMA) announced its decision yesterday to revoke the license of ICG Financial Advisors Group for not fulfilling the conditions.

The CMA had authorized ICG Financial to conduct arranging and advising in the securities business on April 9, 2007, with conditions to be fulfilled prior to commencing the business. However, in spite of CMA approval on March 23, 2009 to extend the period to satisfy the conditions, ICG Financial has not fulfilled the conditions and thus did not commence the business within the granted period, the CMA said in a statement on Tadawul website.

The CMA also has approved Basic Chemical Industries Co.'s request to increase its capital from SR220 million to SR275 million through issuing one share for every four shares owned. The increase will be paid by transferring an amount of SR55,000,000 from the retained earnings to the company's capital. Consequently, increasing company's outstanding shares from 22 million shares to 27.5 million shares, by an increase of 5.5 million shares. The bonus shares eligibility is limited to the shareholders who are registered in the shareholders register at the close of trading on the extraordinary general assembly day, which will be determined later by the company's board, the CMA said.

Arab National Investment Company has received an approval from the CMA to offer Al-Mubarak Gulf Equity Fund, according to the information available on Tadawul website.

By Khalil Hanware


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