Saudi Stock Market Weekly Report - October 3 - October 10

Although there were no fireworks, the market did display a slight improvement in investor sentiment. Instead of the small but gradual decline observed in the past few weeks, the market registered a marginal recovery with the CCFI All-Share index edging up 0.05% to close the week at 198.91. We believe that this is partly attributable to the oscillations of a range-bound market. However, some respite in the threat of war in neighboring Iraq also might have played a part to sooth investor confidence. We maintain our range bound stance on the market in the short-term and believe that no visible trend downward or upward is likely in the coming weeks. In the long-term, however, we are bullish on the Saudi market and believe that its attractive valuations and dividend yield would eventually draw further investment. The market performance, year-to-date, shows a 6.99% increase.

As is so typical of the Saudi stock market, the agriculture sector was the first to benefit from an improvement in sentiment. The CCFI Agriculture Index increased by 2.2% during the week with reasonable volumes. This performance was followed by the electricity sector, which registered an increase of 1%. The cement and industrial sectors showed marginal improvements at 0.4% and 0.3%, respectively. The banking and services sectors, however, declined by 0.4% and 0.2%, respectively. After a long time, the number of gainers was higher than the number of losers; 31 shares increased in price, 23 declined and 14 showed no change.

Trading volume showed no improvement and was reduced further by 4.7%. An even higher decline, 26.5%, was observed in the total value traded. Like always, services sector was the volume leader followed by the industrial sector and the electricity sector. Among the companies, Arriyadh Development Company was the volume leader at 10.1 million shares representing 27.1% of market volume and 19.8% of total value traded. This was followed by Al Mawashi Al Mukairish United Company with a trading volume of 4.9 million shares representing 13.1% of market volume and 3.7% of value traded. The top 5 stocks constituted 63.2% of the market volume and 43.2% of the market turnover.

National Gypsum Company continued to be the top performer for the second consecutive week. Its spectacular rise of 15.4% was accompanied by a trading volume of 0.21 million shares. Year-to-date, the stock is up 32.37%. The second highest gainer was Saudi Industrial Exports Company with a rise of 9.6% during the week. Giving in to gravity was Saudi Chemical Company being the major loser with a decline of 13.5%. Needless to say that this was imminent given its meteoric rise in the past weeks. However, year-to-date, the stock is still up by an unbelievable 360%. The second largest decline, 7.9%, was in the price of Saudi Industrial Services Company. The total market capitalization increased by 0.05% to SR 293.3 billion.