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Saudi Stock Market – Weekly Update
For the Week ending 16 October 2014
“The higher output from OPEC as well as from non-OPEC producers lifted global supply by almost 910 kb/d in
September to 93.8 mb/d. Compared with a year earlier, total supply stood 2.8 mb/d higher, as OPEC supply swung
back to growth and amplified robust non‐OPEC supply gains of 2.1 mb/d”
International Energy Agency, Oil Market Report, October 2014
TASI PERFORMANCE FOR THE WEEK
“TASI loses 12%
to end at 9,548”
TASI LOSES 12% ON GLOBAL ROUT
Tadawul All Share Index (“TASI”) ended a tough week by shedding 12% and closing at 9,548 points. Tadawul’s
year-to-date gain is now curtailed to 11.9%. Crude Oil prices continued its free fall and touched levels unseen in
the last 4 years. In an open letter to ministers, Prince Alwaleed bin Talal has expressed his discontent over Saudi
Arabia’s inaction and tolerance to lower oil prices.
One version being floated around (for inaction) is that oil prices are kept ‘artificially’ low to weaken the government coffers of some of the oil producing countries – possible at the behest of United States. See here and here.
BBC calls it a secret US war on Russia!!
However, one consoling factor for the believers of demand-supply theory is that, Oil price below USD 80 a barrel
will make things unviable for a large number of US shale producers. These private corporations, unlike governments in the GCC, don’t have deep pockets and will thus resort to production cuts helping in price stabilization.
Amidst all the gloom & doom, the optimists are seeing this commodity price fall as a blessing in disguise. Over the
last 5 years, all the central bank money printing has done very little to revive economy and put some real money
in the hands of consumers. The current drop in commodity prices will leave consumers and companies with extra
cash to spend and help in growth! But then, who will manage de(in)flation??
“Crude oil
prices drop to a
4 year low”
Chart 1: TASI Close & Market Turnover
10,600
10,400
10,200
10,000
9,800
9,600
9,400
9,200
9,000
10,378
15,000
10,177
10,145
9,903
10,000
9,548
5,000
0
12-Oct
13-Oct
14-Oct
15-Oct
Total Turnover (SAR Mn) (RHS)
16-Oct
SAR Mn
TASI Close
Chart 2: Trading Statistics
161
6
167
No change
Total No. of Companies
0
Gainers
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Losers
Saudi market
breadth was
Negative with
161 losers and NO
gainers
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Chart 3: Global Indices – Fortnightly Returns
-3.3%
16117
-3.4%
1863
-3.6%
1593
-3.7%
6196
-3.7%
971
-1.6%
1447
-4.7%
8583
-4.8%
14738
-3.1%
7410
-6.1%
4768
-6.4%
12942
-8.1%
6872
Saudi
Om an
Qatar
Abu D habi
Kuwait
Bahrain
Nik kei
DAX
MSCI EM
FTSE 100
MSCI World
S&P 500
DJIA
SSE
-12%
9548
-13.6%
4270
Dubai
-1.4%
2357
Note: Weekly returns are calculated considering Friday to Thursday week. Numbers indicate weekly returns and index closing values.
SAUDI – SECTOR INDICES
“All Sector Indices
ended in the Red”
The downfall in Tadawul did not spare any Sector with all Sector Indices closing the week in
Red. Deep cuts were witnessed in Petrochemicals (-15%) and Insurance (-14.6%) indices.
Transport (-14.4%) and Multi-Investment (-13.2%) also witnessed sizable losses. Index heavyweight Banking lost 12%.
Petrochemicals led the turnover chart contributing 20.6% to total traded value and 19.1% to total volumes. Banks followed suit with 16.8% contribution to turnover and 19.1% to the volume.
YTD
(%)
Total
Volume
(Mn)
Total
Turnover
(SAR Mn)
No. of
Trades
Open
Close
WTD
(%)
TASI
10,851
9,548
-12.0%
11.9%
1,280
41,632
652,515
Banks & Financial Services
22,798
20,047
-12.1%
12.2%
245
7,006
71,701
Petrochemical Industries
8,741
7,427
-15.0%
-1.6%
245
8,565
74,538
Cement
8,508
7,710
-9.4%
9.8%
48
1,672
33,520
17,850
16,087
-9.9%
37.5%
33
2,566
43,891
6,405
6,096
-4.8%
13.8%
12
210
4,249
13,017
11,681
-10.3%
27.1%
53
2,710
53,846
Telecom & IT
3,071
2,793
-9.1%
5.1%
122
2,340
24,182
Insurance
1,653
1,412
-14.6%
17.0%
157
6,082
168,524
Multi-Investment
5,163
4,480
-13.2%
3.0%
30
779
15,344
Industrial Investment
8,984
7,840
-12.7%
10.6%
61
2,675
47,110
Building & Construction
4,761
4,155
-12.7%
18.6%
61
2,047
43,625
Real Estate Development
7,109
6,273
-11.8%
31.7%
180
3,172
39,090
Transport
9,017
7,720
-14.4%
19.2%
22
861
15,236
Media and Publishing
2,669
2,450
-8.2%
-10.4%
2
123
3,627
24,901
22,425
-9.9%
38.7%
10
823
14,032
Index
Retail
Energy & Utilities
Agriculture & Food Industries
Hotel & Tourism
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THIS WEEK’S WINNERS & LOSERS
It was a sea of Red with all the companies listed in Tadawul closing the week at
a loss. Arabian Pipes Co. was the largest loser shedding 28% during the week to
close at SAR 24.4. The Company has lost all its 2014 gains in one week. Bank Al
Jazira and Rabigh Refining & Petrochemical Co. were the other top loser with
24.8% and 24.7% price cuts.
Top Gainer
None
Top Loser
Arabian Pipes
Co.(-28.2%)
SABIC, the gulf’s largest company, was down 17.3% for the week and clocked a turnover of SAR 3.8bn. SABIC has now
lost 2.9% YTD to close at SAR 108.03.
Top Gainers
Company
Top Losers
WTD
(%)
Close
YTD
(%)
Value
Traded
(SAR Mn)
Close
WTD
(%)
YTD
(%)
Value
Traded
(SAR Mn)
APC
24.4
-28.2%
-0.6%
471
BJAZ
26.95
-24.8%
4.4%
1,092
PETRORABIGH
24.32
-24.7%
4.3%
389
FIPCO
52.07
-22.4%
1.8%
280
ALLIANZSF
51.99
-21.8%
35.0%
365
Company
THE LIQUIDITY PLAY (VOLUME – VALUE TREND)
The market activity was higher this week with the overall market trading 1,280mn shares (911mn, 1,116mn shares in the
preceding two weeks). The week’s total turnover was also higher at SAR 41.6bn as against SAR 32.0bn , SAR 36.3bn in
the preceding two weeks.
TASI Weekly Turnover Trend (SAR Mn)
TASI Weekly Volume Trend (Mn)
400
12,000
350
10,000
300
8,000
250
200
6,000
150
4,000
100
2,000
50
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Week -1
Week -2
Week -3
Week 0
Week -1
Week -2
25-Sep
24-Sep
23-Sep
22-Sep
21-Sep
2-Oct
1-Oct
30-Sep
29-Sep
28-Sep
9-Oct
8-Oct
7-Oct
6-Oct
5-Oct
25-Sep
24-Sep
23-Sep
22-Sep
21-Sep
2-Oct
1-Oct
30-Sep
29-Sep
28-Sep
9-Oct
8-Oct
7-Oct
6-Oct
5-Oct
16-O ct
15-O ct
14-O ct
13-O ct
12-O ct
Week 0
16-O ct
15-O ct
14-O ct
13-O ct
12-O ct
0
0
Week -3
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SAUDI – CORPORATE & ECONOMIC NEWS
 Saudi Arabia’s consumer inflation rate rose by 2.8% year-on-year in September 2014, which is the same level recorded in the previous month, according to the Central Department of Statistics.
 The Ministry of Foreign Affairs plans to Saudize all contract jobs at embassies abroad, including allocating a third
of all positions for women.
 National Water Company plans to build a water storage facility with a capacity of 4.6 million cubic metres in Riyadh at an investment of USD 480mn.
 Khurais and Manifa projects in Saudi Arabia have the most recoverable reserves with approximately 19.4bn barrels of oil equivalent (boe) and 13.7 billion boe, respectively, according to research & consulting firm GlobalData.
 Saudi Aramco traded its first fuel oil derivative on Platts and is expected to become more active in its paper trading activities.
 Sage Middle East, a provider of business management software, has partnered with GT Tech, a IT company in
Saudi Arabia, in a move to promote Sage’s new ERP solution for SMEs in the Kingdom.
 Saudi Arabia’s coastal cities Jeddah and Jazan may soon be connected by rail, as the Saudi Railways Organization
completed the first phase of a feasibility study.
 Saudi British Bank (SABB) has reported a net profit of SAR 3,297mn for the nine months ended Sept. 30, an increase of SAR 499mn or 17.8% compared to SAR 2,798mn for the same period in 2013.
 Bawan Company announced the signing of a contract for Islamic financing facilities totalling SAR 550mn through
Saudi British Bank.
 MOBILY has achieved Cisco Cloud and Managed Services Advanced Certification. The certification recognizes
Mobily as having capabilities to sell and deliver cloud and managed services to help accelerate time to market and
time to revenue.
 Al Rajhi Bank reported SAR 5.3bn net profit for first nine months of year 2014, a decrease of 9.76% compared with
SAR 5.89bn of the same period last year.
 Buruj Cooperative Insurance Co. said that it received letter from the Council of Cooperative Health Insurance
(CCHI), which includes stopping the issuance of individual insurance policies on the national cooperative health
insurance network as of Oct. 15, 2014.
 King Abdullah Economic City has concluded a SAR 90mn contract with Creet International Contracting & Design.
The agreement aims to develop first and second phases of the “village” residential compound.
 Madinah Chamber of Commerce and Industry has signed a Memorandum of Understanding (MoU) with the Indonesian Chamber of Commerce and Industry in Yogyakarta
 The National Shipping Company of Saudi Arabia (Bahri) said Homam Star, one of the VLCCs in Vela fleet, was
transferred to Bahri's ownership for a cash consideration of SAR 380mn paid to Vela.
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OTHER GULF NEWS
 Dubai's Atlantis refinanced an USD 880mn loan to take advantage of favourable market conditions. Apart from
reducing the borrowing cost, the loan was also increased in size to USD 1.1bn.
 Kuwait's government is moving towards cutting some of the energy subsidies. The cabinet "accepted" a report by
a committee at the Ministry of Electricity and Water on hiking prices of diesel and kerosene more than threefold.
 Kuwait Foreign Petroleum Exploration Co. has launched a USD 1bn loan into syndication. The deal is being led by
a consortium of banks comprising Bank of Tokyo-Mitsubishi-UFJ, HSBC, JP Morgan, National Bank of Kuwait and
Royal Bank of Scotland.
 Dubai's Fajr Capital said that it was part of a group including Blackstone and Bahrain sovereign fund Mumtalakat
that acquired a "significant minority stake" in UAE-based GEMS Education.
 UAE-based Amanat Holdings, a healthcare and education start-up, will launch its AED 1.375bn initial public offer
next Monday.
 Dubai Silicon Oasis Authority has signed a deal with photovoltaic anti-reflective coated glass producer Chang
Whou Almaden to host a new manufacturing and training facility at its integrated free zone technology park.
 Qatar’s Barwa Real Estate Group said it intends to liquidate its four local subsidiaries - Okaz Media, Barwa Technology, Lucair Real Estate and Knowledge Group.
 The volume of trade between Qatar and Germany is estimated at over EUR 2bn, reflecting continued growth Minister of Economy and Commerce said.
 Qatar Airways has signed a MoU with Gulfstream Aerospace Corp. for purchase of up to 20 aircraft. The agreement was announced in conjunction with Gulfstream’s introduction of an all-new family of business jets.
 Damac Properties has signed an exclusive deal with Paramount Hotels & Resorts to expand its branded hotels and
serviced living concepts to new cities around the region.
 Bahrain will invest USD 22bn in infrastructure over the next four years covering various sectors, Minister of Transportation and Acting Chief Executive of the Bahrain Economic Development Board said.
GLOBAL ECONOMIC NEWS
 German’s Economic Ministry reduced its 2014 growth forecast to 1.2% from 1.8%, and its 2015 prediction to 1.3%
from 2%. The country’s investor confidence fell to the weakest level in two years .
 The cost for insuring Venezuelan sovereign debt against default or restructuring surged as oil prices dropped, illustrating rising investor concerns over the Venezuela’s ability to service its debt.
 Qualcomm Inc. agreed to buy U.K. chipmaker CSR Plc for GBP 1.56bn to expand in technology for connected appliances, two months after CSR rejected a bid from Microchip Technology Inc.
 Financial services group Old Mutual's wealth arm will acquire investment management firm Quilter Cheviot for
GBP 585mn.
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CHARTS OF THE WEEK
Chart 1: Agricultural Commodity Prices
Source: Ed Yardeni
Chart 2: US Stock Prices vs. Brent Crude Oil Price
Source: Financial Times , S&P and Ed Yardeni
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