JEDDAH, 22 August 2005 — The Saudi stock market continued to surge yesterday as the industrial stocks dominated trading.
Dr. Salim Baajaja, a financial analyst, attributed the remarkable rise of industrial stocks led by Saudi Basic Industries Corp. (SABIC) on Saturday to improving oil prices. He however expected a fluctuation of 100 points up or down over the coming week. The Industrial sector index closed 272.70 points higher yesterday at 39,085.18 points compared with an increase of 1,681.43 points on Saturday.
The Tadawul All Share Index (TASI) closed yesterday at 14,659.87, up 68.97 points.
Baajaja also expected balanced growth for the stocks of dairy firms listed on the bourse, especially after the prices of Saudia Dairy & Foodstuff Co. (SADAFCO), National Agriculture Development Co. (NADEC) and Almarai went down. “I believe prices of these companies will go up in the coming days to achieve a balanced growth,” he added.
However, SADAFCO shares closed higher yesterday at SR589, up 0.51 percent, NADEC shares were trading 1.98 percent up at SR514 while Almarai shares were down 0.76 percent at SR780
Financial experts believe that the continuous rise in oil prices is driving the Saudi financial market indicator to new high. According to financial experts, the news of increasing price of oil is good because it reflects positively on production related to oil. According to experts, SABIC shares are very attractive to investors despite the high prices. If prices of oil increased to more than $80 per barrel, the prices of SABIC shares would double in value. Because SABIC is active in all the world’s important markets and continues to focus on global growth opportunities that can deliver improved operating results in the years to come.
SABIC shares were trading yesterday at SR1,640.
SABIC’s profits grew at a record-breaking pace in 2004. SABIC recorded net profits of SR14.2 billion ($3.8 billion), an increase of 112 percent over the precious year. Revenues from product sales increased to SR68.5 billion ($18.4 billion) to become the largest and most profitable public company in the Middle East.
Earnings per share increased to SR47 ($12.53) in 2004, compared to SR22 (5.86) in 2003. Likewise, return-on-equity increased to 31 percent in 2004, compared with 18 percent in the previous year. Total assets at the end of 2004 exceeded SR125 billion ($33 billion).
SABIC’s market capitalization at the yearend was more than SR375 billion ($100 billion). In 2004, the value of SABIC shares, listed on the Saudi stock market, increased 170 percent.
SABIC now operates 20 manufacturing sites around the world, producing a broad range of products.
SABIC paid dividends totaling SR3.2 billion to company shareholders at SR8 per share for the company’s operations during the first half of 2005.
SABIC has come a long way since its creation in 1976 to diversify and consolidate Saudi Arabia’s non-oil business.
The banking index was also higher yesterday by 199.82 points at 32,597.20. The Electrical and Telecom indices Fell yesterday. The Electrical index dropped 20.41 points at 2,591.91 while the Telecom index was lower by 10.98 points at 5,493.02.
Meanwhile, the regional gas company, Dana Gas, based in the United Arab Emirates, intends to float part of its shares valued at 2.1 billion dirham for public subscription by the middle of next month, press reports said. The company plans to implement a number of gas projects in the Gulf and other parts of the Middle East.
