Saudi market cap rises by 10.86% to SR1.33 trillion
Daily Market Commentary
The Saudi stock market continued its positive performance on the first day of trading this year on Saturday after surging over eight percent last year. The Tadawul All-Share Index (TASI) rose to the highest level in almost eight months to close 0.51 percent or 33.65 points higher at 6,654.40, the highest since May 12.
"The stock market performance reflects the positive mood of investors. The first day of trading shows investors have entered 2011 in a relatively bullish mood and they are expecting encouraging corporate earnings for the fourth quarter," Faisal Alsayrafi, managing director and CEO of the Financial Transaction House (FTH), said.
The sector activity for the day was mostly positive with 12 out 15 closing with gains ranging from 0.05 percent by the Energy & Utilities sector to 2.05 percent by the Building & Construction sector. On the other hand the losing sectors were the Insurance sector with 0.03 percent, the Hotel & Tourism sector with 0.08 percent and the Media and Publishing sector with 0.82 percent. The overall market breadth for the day was positive with 78 advancers against 33 decliners giving it an AD ratio of 2.36, the FTH said in its daily market commentary.
The stock market turnover reached SR2.79 billion on Saturday.
Arabian Pipes Company was the top gainer on Saturday as its shares soared 9.89 percent to SR30. Al-Rajhi Bank shares closed 1.20 percent higher at SR84. The only loser in the Banks & Financial Sector was Bank Albilad. Its shares fell 0.51 percent to SR19.45. Saudi Arabia Fertilizers Co. (SAFCO) shares surged 2.66 percent to SR164.
Shares of Saudi Telecom Co. (STC), Etihad Etisalat (Mobily) and Zaina KSA were inthe positive territory on Saturday.
In the Real Estate sector, shares in Dar Al-Arkan Real Estate Development Company jumped 4.44 percent to SR9.40.
At the end of 2010, TASI gained 498.99 points or 8.15 percent to close at 6,620.75points compared to 6,121.76 points for the previous year. The highest close level for the index during the year was 6,929.40 points as on April 26, according to Tadawul's Annual Statistical Report - 2010 released on Saturday.
The total market capitalization in 2010 reached SR1.33 trillion, increasing by 10.86 percent as compared to the end of the previous year.
However, the total value of shares traded dropped 39.94 percent to SR759.18 billion compared to SR1.26 trillion for the previous year, the Tadawul report said.
The total number of transactions executed last year reached 19.54 million compared to 36.46 million trades for the previous year, decreasing by 46.42 percent.
The total number of shares traded last year dropped by 42.22 percent to 33.01 billion compared to 57.13 billion shares traded during the previous year.
Commenting on the Tadawul's 2010 report, John Sfakianakis, chief economist at Banque Saudi Fransi, said, the Saudi stock market is expected to perform better this year than in the previous year. 2010 was a difficult year as market confidence fluctuated significantly. Banks, petrochemicals and industrials as well some general retail-oriented companies and food producers should have a solid year in 2011 in terms of profits. Banks and petrochemicals will play a very important role in market confidence as their weight in the overall index is very significant, acting as a mood maker and index maker. What characterized 2010 were lower volumes due to a gradual approach to investor behavior. Bank profitability concerns and additional provisioning did also help generate lower confidence levels over 2010. Concerns about sovereign debt crisis in Europe did not also help alleviate investors' concerns in general.
"The only downside risk for 2011 is a possible correction in mature stock markets, especially the ones in the US. Without such a correction, the Saudi stock market could build momentum in order to break the 7,000 level and for the stock market to end the year at 7,650 points," Sfakianakis said.