16/03/2011
Tadawul index plunges over 3.5 percent
Gulf Arab markets fell on Tuesday as Japan faced up to a potential nuclear catastrophe
Gulf markets rallied hard to Sunday's close, recovering from early-March multiyear lows, but this trend has reversed again and further declines are forecast.
Shares in Saudi Arabia, the world's top oil exporter, slid 3.5 percent. The Tadawul All-Share Index (TASI) closed at 6,011.85 points on Tuesday. The sector activity for the day was all negative. The losing sector ranged from 5.83 percent by the Multi-Investment sector to 0.61 percent by the Hotel & Tourism sector. On the other hand there was no gaining sector. The overall market breadth for the day was negative with 3 advancers against 145 decliners giving it an AD ratio of 0.55, the Financial Transaction House (FTH) — licensed by the Capital Market Authority (CMA) — said in its daily market report.
The stock market turnover for the day reached SR5.38 billion.
“The market fell due to the situation in Bahrain but also due to the wider jitters felt from Japan. However the Saudi government is committed in maintaining market stability. There is no doubt that the plunge offers a buying opportunity for others as the Saudi economy is on very solid macroeconomic grounds,” said John Sfakianakis, chief economist at Banque Saudi Fransi, Riyadh.
"The net effect of Japan on Saudi Arabia will be negligible - it's more of a sentiment thing, with crude falling," said a Riyadh-based trader who spoke on condition of anonymity.
"There's a lot of value in the Saudi market. If there's a big sell-off in petrochemicals I would get buying with an eye on Q1 earnings."
Petrochemicals firm are expected to post strong quarterly results after oil prices spiked in early March, with crude seen as a proxy for both petrochemicals prices and demand, Reuters said.
Saudi Basic Industries Corp. (SABIC), which is active in Japan, dropped 5.3 percent, SABB fell 4.1 percent and Zain Saudi lost 9.9 percent.
"Nothing has really changed in terms of company fundamentals - economic growth remains high and inflation is low," said a Riyadh fund manager who asked not to be identified. "Interest rates will remain the same and people will return to equities, but the weekend effect will also have an impact on Saudi investor sentiment tomorrow."
Wednesday is the final trading day of the Saudi week.
Dubai's index fell 1.9 percent to 1,447 points to be down 11.3 percent in 2011.
The Abu Dhabi index fell 0.6 percent to 2,615 points..Dubai Financial Market fell 5.7 percent after its fourth-quarter profit plunged 93 percent.
The Qatari index dropped 1.4 percent to 8,185 points.
Kuwaiti benchmark fell 0.2 percent to 6,407 points.
Omani index fell 1.7 percent to 6,293 points.
Bahraini measure edged lower 1.6 percent to 1,395 points.
