DJIM OK'd to offer indexes on Tadawul

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JEDDAH - The Saudi Stock Exchange (Tadawul)Saudi Stock Exchange (Tadawul) allows Dow Jones Islamic Market Indexes (DJIM), New York, to offer indexes on the Saudi market under the agreement signed between TadawulTadawul and DJIM on Tuesday.

DJIM, a leading global index provider, in effect, becomes the first international index provider to offer indexes on TadawulTadawul which accounts for nearly half of the entire market capitalization and nearly three quarters of the entire value traded of all GCC stock exchanges.

As this developed, TadawulTadawul index ended 0.93 percent higher on Tuesday at 5,457.71 points due to a generally oversold market.

Islamic insurance operator SABB Takaful rebounded 10 percent, closing at SR96.25. From a chart-technical point of view, the share is still moving within an upward channel which started at the beginning of 2009, despite heavy losses during the last weeks.

On its website, TadawulTadawul said DJIM is authorized to "use real-time TadawulTadawul price and other data to create indices, which may measure the performance of the Saudi stock market and may serve as the underlying for third-party investment products such as mutual funds, ETFs and other financial products that enable investors to participate in the performance of the Saudi stock market."

TadawulTadawul CEO Abdullah Suweilmy said "we are delighted that Dow Jones Indexes is now positioned to set new standards for both performance and investible indexes in Saudi and the region, and provide reliable underlying tools for financial management to the domestic and international investment communities."

"Asset managers can now securely deal with an authorized and international index provider - Dow Jones Indexes, the first such authorized provider - when using indexes containing Saudi data," he added, noting that DJIM and TadawulTadawul have agreed to jointly investigate other ways in which "we can work together in the future."

DJIM President Michael A. Petronella said "the agreement with TadawulTadawul is an important milestone for Dow Jones Indexes and enables us to include Saudi Arabian stocks in our broad index universe immediately, including selected indexes covering the GCC and MENA region."

He added that fund managers around the world "now have access to authorized local, regional, global and custom indexes that incorporate the widely sought after Saudi Arabian stock market for benchmarking funds and portfolios and as the basis for traded products."

In the first six months of 2009, TadawulTadawul's total value of shares dropped by 39.38 percent to SR780.05 billion ($208.01 billion) against SR1.087 trillion during the same period last year, the Tadawul Statistical Report said on Saturday.

Nonetheless, the bourse's future seemed rosy, with positive trends expected halfway through 2009.

The Tadawul All Share Index (TASI) closed at 5,596.46, losing 3,755.86 points or 40.16 percent over the close of the same period last year.

Meanwhile, total equity market capitalization fell 39.38 percent to SR1.07 trillion ($286.49 billion), down by 39.46 percent during the same period of the previous year.

However, total traded shares (adjusted) rose by 11.90 percent to 38.07 billion, compared to 31.25 billion in the first half of last year. Total transactions declined by 27.59 percent to 22.63 million, compared to 21.25 million in the first half of the previous year. On a year-to-date basis TASI registered a positive return of 793.47 points or 16.52 percent. On May 23, the index closed at its highest level of 6,100.85. There were 129 trading days during the first half of 2009, against 130 trading days during the first half of 2008.

Separately, TadawulTadawul announced that the second issue of Saudi Electricity Sukuk have been deposited into applicable investor's portfolios on Tuesday.

By Querubin J. Minas

© The Saudi Gazette 2009