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Shares Hit by Bear-Hammering

December 2006
The overall trend of Saudi Stock Market was bearish during the one month period ended 20th November and the fear of further retreat gripped the market. Out of the 18 trading days, the market was up on 7 days and down on 11 trading days and finally closed at 8,482.82 on 20th November. During the period, TASI lost 2,062.53 points (TASI closed at 10,545.35 on Wednesday, 18th October) registering a negative growth rate of 19.56%. The highest single day gain of 8.02 % was observed on 12th November, whilst highest single day loss of 5.74% was observed on 4th November. In terms of price change, 6 stocks were up, 78 stocks down as compared to that of last period.

For most part of the period, speculative stocks were driving the market; blue chip stocks could not enthuse the investors despite anticipated favorable Q3 results.

The CCFI index closed for the period at 658.57 as compared to that of 817.48 on 18th October and lost 158.91 points, a drop of - 19.44% for the period. The YTD percentage change of the CCFI index is -48.93%.

The market capitalization at the end of the period stood at SR 1301.70 billions ($ 347.12 billions).

Sectoral Performance: The indices of all the eight sectors registered negative growth. Agriculture sector was the most to go down (-51.67%), followed by Services (-46.39%), Electricity (-20.55%), Industrial (-20.51%), Banking (-18.92%), Insurance (-12.85%), Cement (-11.63%) and Telecom (-7.13%).

Market activity: 3398.59 million shares were traded at a value of SR197.04 billion for the period. Market activity in terms of volume and value traded decreased by 21.69% and 42.22% respectively as compared to that of the previous period. Market Capitalization decreased by 19%.

Insurance, Telecom, Banking and Cement sectors witnessed increased volumes by 106.13%, 44.74%, 30.41% and 23.61% respectively. Electricity, Services, Industrial and Agriculture sectors registered decreased volumes by 61.31%, 24.01%, 18.74% and 3.16% respectively.

Only Insurance and Telecom sectors witnessed increased turnover (value traded) by 73.90% and 32.62% respectively. Electricity sector was the most to go down in turnover by -69.08% and followed by Services (-48.58%), Industrial (-45.60%), Agriculture (-37.31%), Cement (-4.81%) and Banking (-0.72%).

The Services and Industrial sectors dominated the market activity for the period and accounted for 70.43% of the total volume and 66.43% of the market turnover for the period.

Performance of Five most
Active stocks: For the month reviewed, the 5 most active stocks together accounted for 18.16% of the total volume traded, 15.35% of the value traded and 22.21% of the total market capitalization. MMUCO led the market in terms of volume traded (172.61 million shares at a value of SR 4.64 billion), followed by Emaar (390 million shares at a value of SR 4.14 billion), AADC (118.23 million shares at a value of SR8.15 billion), GIZACO (116.34 million shares at a value of SR5.66 billion) and SABIC (78.65 million shares at a value of SR8.59 billion).

Gainers and Losers: SAMBA topped the list of gainers (5.51%), followed by RIBL (2.17%), ARNB (1.83%), SRMG (1.06%). ASACO topped the list of losers (-63.04%), followed by ABDICO (-62.50%), THIMAR (-20.22%), TAPRCO (-56.83%) and GIZACO (-55.79%).

Some of the blue chip companies that lost during the period are: SABIC (-16.38%), SHB (-14.21%), SAIB (12.47%) and STC (-6.67%).

The Price to Earning (P/E) and Price to Book Value (P/B) ratios for the period were at 17.06 and 4.21 times respectively.

Corporate news
BJAZ: The Board decided to recommend to the extra-ordinary general assembly (after getting the approval of the competent authorities) to increase the Banks capital from SR 1,125 million to SR 2,250 million by way of capitalizing SR 1,125 million from the retained earnings. The total number of shares prior to the capital increase is 112.5 million and will become, after the increase, 225 million shares through granting of one bonus share for every one share held (an increase of 100%). The Bank reported record profits for the first 9 months of 2006 to the tune of SR 1,772 million, a percentage increase of 266% over the corresponding period of 2005.

SAIB : SAIB , Amlak (U.A.E), Aseer Co. and Al Baraka Investment and Development Co. announced that they have formed an alliance to establish the first real estate financing closed company with a total capital of SR 1,000 billion. to be based in Riyadh.

SAIB 's share in the proposed company will be 29%.

SAIB announced that its board has decided to make a recommendation to the extra-ordinary general assembly, and after obtaining the official approvals, to increase the Banks Capital from SR 2,406 million shares to SR 3,910 million shares by way of granting one bonus share for every 1.6 shares held.

SAMBA : will acquire 68% of Crescent Commercial Bank Limited in Pakistan through the issuance of new 600 million shares of the said Banks shares with a total value of 6 billion Pakistani Rupee $100 million and a nominal value of 10 Rupees per share.

This process represents an increase in the Banks capital. The acquisition process entails obtaining the approval of the concerned bodies in the Kingdom of Saudi Arabia and the Republic of Pakistan.

SABIC Europe - owned by Saudi Basic Industries Co. (Sabic) has announced that it has obtained a finance of Euro 750 million through offering term bonds of seven year maturity, to finance the purchase of Huntsman Petrochemicals complex in U.K. "JP Morgan" and "HSBC" Banking Group carried the coordination and arrangement.

ADC reported net profits of SR 94.3 million for the period 1/1/2006 to 30/9/2006 compared to SR 84.9 million for the corresponding period of the previous year, a 11.1% increase.

The 3rd quarter's profits stood at SR 32.4 million compared to SR 21.1 million for the corresponding period of the previous year.

Amiantit reported net profits for the 9 months period ending 30/9/2006 to the tune of SR 30.7 million compared to a loss of SR 14.9 million for the corresponding period of last year.

FIPCO Board held a meeting on 14/11/2006 and took the following decisions: (1) make a recommendation to the general assembly to distribute dividends for the year 2006 @ SR 1.20 per share. The board also approved the Company's management proposal regarding the addition of new production lines.

SADAFCO reported net profits for the six months period ending 30/9/2006 to the tune of SR 11.1 million compared to SR 31.4 million for the corresponding period of 2005, decreasing by 64.7%.

Nama Chemical Company announced that it has completed the expansion work on the Epoxy Plant of the Company resulting in addition of 15 000 tons per annum to the plant's annual capacity, a 50% increase.

© Saudi Commerce and Economic Review 2007