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Monthly SSER: Renewed Confidence and the Oil Boom Push up Shares Sky-high

September 2005
The Saudi Stock Market started its unabated surge on Monday, 24th July 2005 gaining an impressive 2.21%. During the month ended 20th August 2005, the market registered mammoth gain of 19.34%.

TASI index reached another psychological mark of 13,930.49 on Thursday, 11th August 2005 and continued breaking new records; it crossed 14,000 psychological mark on Saturday, 13th August and reached new all time high of 14,347.17 on 14th August.

The strong gains of the market were attributed mainly to increasing oil prices in international markets and to the confidence shown the new Saudi leadership.

Key Market Trends

CCFI All Share Index opened the month at 936.65 on 21st July 2005, where it lost 0.40%. However, it registered gains on 20 out of 26 trading days and closed the month ended on 20th August at 1,122.30 with a new peak during a month time. This enabled the market to close the month under review with a hefty gain of 19.34%, which lifted YTD return to 77.81%. During the month under review, highest single day gain of 2.21% was witnessed on 24th July 2005, whereas highest single day loss of 0.64% was observed on 15th August 2005.

The market capitalization at the end of month under review stood at SR 2.108 trillion ($ 561.25 billion). The breadth of the market was highly positive, as all 77 stocks gained in value while no stocks closed the month with a loss. The price to earning (P/E) ratio and price to book value (P/B) ratio stood at 35.62 times and 8.72 times as on 20th August 2005.

Sector Performance

In line with bullish sentiment witnessed across the board, all sectors reported gains during the month. Top gaining sectors during the period include industrial, cement and agricultural sectors, as their indices gained a hefty 35.27%, 22.45% and 21.56% respectively. Key movers of the market were service and banking sectors, which improved by 19.94% and 11.29% respectively. Insurance and electricity sectors managed to gain 10.77% and 10.35% respectively. On year to date basis, only electricity sector is in negative zone, whereas industrial, banking, cement, service, agricultural and insurance sectors stand with gains of over 50%.

Market Activity

The positive market sentiment kept the market activity high as activity indicators, volume traded and value traded, gained relative to previous corresponding month. Volume traded witnessed an increase of 27.8%, whereas value traded showed increase of 33.2% relative to previous month. At sector level, activity increase was witnessed among six sectors, whereas two sectors recorded decrease in trading volume and value traded relative to pervious period. Cement, industrial and electricity sectors' activity indicators improved during the current period, as volume traded of these sectors increased by 66.9%, 43.4% and 39.7% respectively, whereas value traded jumped by 65.3%, 41.8% and 43.9% respectively. Insurance and service sectors also witnessed increased activity in volume and value traded, as insurance sector recorded increase of 10 % and 7.5%, whereas service sector registered increase of 9.0% and 0.9% respectively in volume and value traded.

Telecommunication and agricultural sectors witnessed decreased activity in volume and value traded, as telecommunication sector recorded decrease of 27.8% and 33.2% respectively, whereas agricultural sector registered decrease of 3.4% and 12.2% respectively in volume and value traded.

In terms of proportional distribution of activity, industrial sector represented major share of 35.3% & 49.01% in total volume traded and value traded respectively.

Performance of Top Ten

During the period, top 10 active shares accounted for 43% of the total value traded, whereas remaining 67 shares represented the rest 57%. These 10 stocks represented 35% of the total volume traded and 55% of the total market cap at the close of the month under review. Amongst the individual stocks, SABIC and Alujain Company (ALCO) lead the market, as SABIC witnessed trades of 26.68 million shares amounting SR 36.80 billion that constituted about 11.49% of the total value traded of market, while ALCO saw 51.03 million shares changing hands that constituted SR 14.59 billion, which represented 4.55% of the total value traded of the market.

Gainers and Losers

Amongst the gainers and losers, as stated above, high bullish sentiments resulted into highly positive market breadth, which was characterized by all 77 scripts ended in gains, (Almarai Company listed on 17th August 2005). Tihama Advertising and Public Relation Company (TAPRCO) was the top gainer with a mammoth gain of 73.53%. Al Baha Investment and Development Company (ABDICO), National Gypsum Company (NGCO) and National Manufacturing & Casting Company (Maadaniyah) gained 58.09%, 57.18 and 43.04% respectively. There were 40 stocks that gained more than 20%, whereas 27 scrips gained more than 10% but less than 20%.

Corporate Developments (July-August)

Ahmed Hassan Fitaihi Company (AHFCO) announced to its shareholders that it obtained the Capital Market Authority approval no 1/94/2005 dated 18/7/1426 for the capital increase from SR 220 million to SR 385 million by issuing 3.3 million ordinary shares at the price of SR 90 (SR 50 as par value and SR 40 as issue premium) and subscription will be three shares for each share. Subscription in these new shares will be limited to shareholders registered in the company's records by the end of the trading day of the extra-ordinary general assembly to be specified in the coming days. The proceeds of this subscription (SR 297 million) will be used to finance future projects of the company by opening new showrooms in Saudi Arabia and other Gulf Countries.

Aseer Trading, Tourism and Manufacturing Company (Asser) announced that its chairman signed a consultancy agreement with The Gulf International Bank for the public floatation of Halawani Akhwan and Al Rabei companies.

Tourism Enterprises Company (SHAMS) announced the completion of all the procedures pertaining to the sale of its share in Al Jazeera Company in Bahrain.

The share value has been fully received and thus SHAMS has no investment outside KSA. The deal realized capital gain of about SR 1.0 million

Capital Market Authority announced the listing of Al Marai Company shares in Tadawul on Wednesday, 17th August 2005.

The board of directors of Riyadh Bank invited its shareholders to attend the extra ordinary general meeting that would be held on Monday, 12th Sep 2005. The meeting would consider authorizing board of directors to take the necessary procedures to issue deposit certificates, bonds, and securities and determine their values within the stated regulatory limits and other issues.

Zamil Industrial Investment Company has asked its shareholders who had not yet received their dividends to contact SABB branches in the Kingdom.

Saudi Hotels and Resort Areas Company announced that the news about freezing its bank balances were mere rumors.

Saudi Arabia Refining Company issued its financial statements for the first quarter on 31 July 2005.

The company realized a net profit of SR 924,752 for the mentioned period.

National Gypsum Company announced the doubling of its current production of 6 million square meters of gypsum sheets and 500 tons of gypsum powder on daily basis. It was decided to establish new factories in addition to the existing ones, thus the daily production capacity would be 12 million square meters of gypsum sheets and one thousand tons of gypsum powder. Contracts to implement the above mentioned expansions were signed on Wednesday, 10th August 2005.

Saudi Arabia Amiantit Company announced that its total contracts made in the first half of 2005 exceeded SR 794 million for industrial and infrastructures projects in KSA, UAE, Qatar, Kuwait, Oman and Yemen.

This announcement came after approval from the General Assembly for the capital increase from SR 770 million to SR 1.15 billion.

H.E. Sheikh Khalid Ibrahim Abdulaziz Al Ibrahim Chairman of Saudi Automotive Services Company (SASCO) declared that SASCO had finalized selling of its three workshop plots in Riyadh, Jeddah and Dammam to M/s Abdul Aziz Al Tukhayem Real Estates Group for a total sum of SR 160,784,837, the cost of these workshops in total being SR 78,600,234.

Applying the transparency and disclosure principles and in compliance with Article (32) of the listing rules of CMA, Bisha Agriculture Development Co. announced that Mr. Faisal Ali Al Khadran Al Harithi now holds 5.15% of its shares.

In compliance with transparency and disclosure principles and Article (32) of the listing rules, Saudi Hotels and Resort Company announced that the shareholder Nazik Osman Abdulla Abdul Jabbar now holds 5.36% of the company shares as of 5/8/2005.

Makkah Construction & Development Company board has invited its shareholders to normal general assembly 16th meeting to be held in the evening of 30/11/2005.

Tihama Advertising & Public Relations Company has declared that its Ordinary General Assembly will be held on Thursday 8/9/2005 at 21:00 at its Head Office, Jeddah.

© Saudi Commerce and Economic Review 2005