MARKET TALK: Saudi All Share Index Closes Up 1.4%

Wednesday, Aug 02, 2006

RIYADH (Zawya Dow Jones)--The Saudi Tadawul All Share Index ended up 1.4% at 10.761.25 points on Wednesday, continuing its vacillating performance as about 213.3 million shares valued around SAR13.4 billion changed hands.

The eight sector indexes rose, led by agriculture (6.7%), cement (3.3%), and electricity (2.7%). The strongest gainers were Tourism Enterprises Co., which rose 9.97%, and Ash-Sharqiyah Agricultural Development Co., also up 9.97%. The biggest loser was Taiba, down 1.6%; followed by Saudi Holandi Bank, down 1.15% and Saudi Industrial Export Co., down 0.7%.

Nahed Taher, CEO of Gulf One Bank, said volatility in the index was high in the last few weeks, and there was a lack of confidence among investors due to the latest market crisis.

"The summer vacation also adds to the downside pressure on the index, with lower trading activities. I believe the Saudi stock market has a great potential but for long-term investors, not greedy speculators," Taher added.

Basil M. Al Ghalayini, founder and chief executive of BMG Financial, pointed to the high political tension in the region. Investment decisions, he said, require some assessment of the political future of the country and its neighbors, although the World Bank recently said the Israeli-Lebanese crisis has had only a minor impact on international stock markets.

"Regarding the continuity of these negative effects, it will all depend on how long the Lebanese-Israeli war will continue," al Ghalyini said.

Mohammed Alsuwayedm, managing director of Gulf Investment Group Ltd., said the Saudi stock market was in consolidation the last couple of weeks, generally affected by current local IPOs. But lately, with the new developments in Lebanon, the index went down to the 10,172 level, breaking several support levels, including a long-term trough at 11200 points, he said.

Wednesday's rise isn't a convincing enough signal that the market is getting any better, and the index is expected to fall below 10,000 points.

By Anees Alqudaihi, Zawya Dow Jones

(END) Dow Jones Newswires

08-02-06 1432ET