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MENAFN - Arab News - 30/01/2010

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(MENAFN - Arab News) Saudi shares lost fresh ground last week with additional pressure coming from China's restrictions on bank loans, which renewed concerns over receding demand for crude oil by the world's second largest economy.

The Tadawul All-Share Index (TASI) shed 2.03 percent last week, crashing the 6,300-point psychological barrier and closing at 6,252.71 points.

TASI is currently 2.1 percent higher than the year's start.

"The Saudi market was negatively affected by developments of the US economic policies," the Riyadh-based Bakheet Investment Group (BIG) said in its weekly report.

The group expected the Saudi market to rebound this week and "to recoup its losses."

Kingdom Holding Co. was the top gainer last week as its shares surged 7.80 percent to SR7.60. The other major gainers were Abdullah Al-Othaim Markets Co., 6.16 percent, Al-Baha Investment & Development co., 4.41 percent, Yamama Saudi Cement Co. Ltd., 3.70 percent, and United International Transportation Co., 3.59 percent.

Al-Sagr Cooperative Insurance Co. shares plunged 1.83 percent to SR53.50 last week. The other major losers last week were Saudi Cable Co., down 8.81 percent, Middle East Specialized Cables Co., 7.16 percent, Bupa Arabia for Cooperative Insurance, 6.08 percent, and Saudi Industrial Investment Group, 6.08 percent.

The stock market turnover also declined to SR15.09 billion last week compared to SR19.15 billion in the previous week.

The Capital Market Authority (CMA) announced last week that the listing and trading of Herfy Food Services Co. would take place on Tuesday within the Agriculture & Food Industries sector, with an unrestricted price limit for the first day of trading only.

Saudi corporate earning announcements continued last week, with 110 of the 132 listed firms on Tadawul last year having disclosed their results. The combined net profit of the firms increased by 25.6 percent to SR57.73 billion in 2009, from SR45.97 billion in 2008. This constituted an approximate 47 percent decline from SR86.54 billion attained in 2007, the National Commercial Bank (NCB) said in its weekly market review.

Excluding the profitability of the 11 listed Saudi banks, the combined net profits rose by 63.9 percent to SR35.5 billion in 2009, the NCB report said.

The net profits of the listed banks declined 8.6 percent to SR22.22 billion in 2009 largely on credit related provisions. However, with NCB's strong positive outcome, the Kingdom's banking sector's earnings plunge moderated to 0.3 percent down to SR26.3 billion in 2009.

The 60.3 percent drag in petrochemical earnings was largely due to prices in the international markets that affected SABIC (Saudi Basic Industries Corp.) profits. The companies largely influenced by domestic economic activities were the biggest gainers, with agriculture sector showing 62 percent earning growth in 2009, the NCB report said.

Arab stock markets extended losses last week under the impact of plunges at global markets and falling oil prices, financial analysts said Friday.

However, they expected the 2009 results of listed firms to remain a moving factor for regional markets for weeks to come.

"The psychological correlation between Middle East bourses and global markets is surfacing again as one of the factors to reckon with," an Amman-based portfolio manager said.

The Wall Street and other global bourses suffered last week as a result of US President Barack Obama's announcement of measures to limit the size of banks and financial firms and to impose restrictions on risky transactions, he said.

"His (Obama's) remarks in the State of the Union address apparently cast doubt on the world recovery and put downward pressure on crude prices with fallout on Gulf stock markets," he added.

Jordanian shares were volatile last week due to what analysts described as lack of incentives and shrinking liquidity.

The all-share index of the Amman Stock Exchange lost 0.87 percent last week, closing at 2,531 points, according to the ASE weekly report.

Kuwait's KSE all-share price index shed 0.4 percent last week, closing at 7,035 points with pressure coming from the banking sector, analysts said.

The United Arab Emirates shares continued to come under pressure from foreign selling and the spill-overs of the Dubai World debt issue, analysts said. The benchmark of the Dubai exchange plummeted 3.2 percent to 1,599 points. Abu Dhabi's index closed lower at 2,628 points from 2,637 points previous week.

Egypt's AGX30 index, measuring the performance of the market's 30 most active stocks, lost 2.5 percent to close at 6,696 points.

The GulfBase GCC index declined 2.24 percent to 3,663.73 percent. The value of GCC traded shares also fell 12.18 percent to 6.30 billion and volume dropped 4.60 percent to 5.16 billion of shares.

By Khalil Hanware & Abdul Jalil Mustafa


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