2004 News Story

Saudi stock market up one third since start of year

At the close of the Saudi stock market yesterday, shares had risen 3.1 percent for the week, buoyed by a surge in the newly-listed Sahara Petrochemical Company as well as strong oil prices and a move towards market reform, with turnover at SR35.9 billion ($9.8 billion). The all-share index climbed for a third week to close at 5,921.27 points, up from 5,745.75 last week. The index, although down from a record 6,455 points in May, is still up by more than 33 percent this year after rising 76 percent in 2003.

Investors have reacted positively to the establishment of a supervisory board under the 2003 Capital Markets Law, seen as a major step towards long-awaited reforms. Sahara, which started trading Wednesday, surged 230 percent from its offer price to close the week at SR165. The company was recently established by Al-Zamil, one of the Kingdom's largest private trading groups, to set up an olefins complex and a polypropylene plant. Meanwhile, blue-chip Saudi Electricity Company, which dominated trading with 21.5 percent of the total turnover, gained 9.9 percent to SR135.50. Savola, a foodstuffs group, climbed 8.9 percent to SR489 after reporting a 27-percent gain in half-year net profits. Gainers outnumbered decliners in the week by 61 to 10. The market was also supported by stronger oil prices, which have been a boon to the Saudi economy, boosting investor liquidity as well as corporate earnings.