Saudia Arabia Stock Market Weekly Report

The market staged a small recovery during the last week. The week started on a positive note and the CCFI All-Share Index rose 1.5% on the first trading day but then gradually declined in the following days. However, the last two days again saw some positive movement. All sectors ended the week in positive territory and the stocks gaining in value far outnumbered those that lost. The trading activity also improved with a considerable increase in weekly trading volume. The recovery can be attributed mainly to two factors. First, after declining continuously for almost two months, a technical correction was due, even if there was no major change in the long-term trend. Second, the approval of UN resolution on weapons inspection in Iraq, at least for the moment, removed some uncertainties and pushed further the specter of war. While expectations of a complete recovery from recent declines would be slightly optimistic, the upcoming budget on November 25 might carry some triggers for an upward movement. YTD, the market is up by 2.9%.

Sectoral performance was positive across the board with all sectors marking some level of increase. As per our expectations mentioned in our last week report, the best performer was the agriculture sector gaining 1.7% in value. Qassim, Hail, Jazan and Jouf Agriculture development companies were the major contributors towards this rise. The second best performance came from the cement sector, which posted a gain of 0.8% supported mainly by increase in the prices of Arabian Cement, Yanbu Cement and Eastern Province Cement companies. This was followed by the services sector that registered an increase of 0.6% owing mainly to the increase in the prices of Al-Baha for Development Company, National shipping and Saudi Automotive Services Company. The banking and electricity sectors both increased by 0.5% each. The worst performer was the industrial sector that gained only 0.1%.

Trading activity picked up considerably and the weekly trading volume increased by 87.5%. The average daily trading volume was 3.15 million shares. Services sector continued to be the most active with 50.5% of market volume and 28.0% of total value traded. This was followed by the industrial sector, which represented 24.9% of market volume and 29.6% of value traded. The electricity sector was third in terms of volume while the banking, cement and agriculture sectors experienced marginal trading. Among individual companies, Saudi Electric was the most active with 14.5% market volume and 10.23% market value traded. Al-Baha for Development Company was the second most active with 12.3% market volume and 5.03% value traded. We expect the market to remain relatively active in the coming weeks.

Al-Baha for Development Company was the top gainer during the last week registering an increase of 8.9%. The stocks rise, accompanied with high volumes, suggests that we might see further increase in the following weeks. Its performance during the current year, 80.3% increase YTD, has been phenomenal. In its footsteps was the Arabian Industrial Development Company with a rise of 6.57%. YTD, the stock is up by 78.8%. Qassim Agriculture and Hail Agriculture Companies also performed well with gains of 4.9% and 4.5%, respectively. The worst price performance (-5.9%) was by Saudi Chemical Company; however, it is negligible considering the YTD rise of 316%. Filling & Packaging Material Mfg Company was the second largest loser declining by 4.5%. The price of 41 shares increased while there was decline in the price of 14 shares. The price of 13 shares remained unchanged.