Arab Bank deal fires the market

In an unprecedented JD16.7 million deal brokered solely by Atlas Investment Group, the Social Security Corporation on Sunday acquired 100,000 shares of market heavyweight Arab Bank (ARBK) from Kuwaiti investors.

The bloc trade was executed at a price of JD167 per share, with the price jumping as high as JD172 before finally closing at JD168.5 for that day. The transaction was the largest ever by a single broker and the largest in ARBK's history.

The deal came as the Arab Bank Group announced first quarter results for 2001 of US$87 million, an 18% jump in net earnings over the same period last year - thus re-affirming the bank's reputation as one of the region's most solid financial institutions.

The deal jump-started trade across the board, as more than 6 million shares changed hands throughout the week in deals worth almost JD26 million. Even excluding the ARBK deal, value traded was relatively impressive, with the AMI making gains throughout most of the week to edge up by 1%.

The tobacco sector caught fire this week, with Union Tobacco & Cigarettes (UTOB) the biggest advancer, making a 16% increase, while International Tobacco & Cigarettes (ITCC) bounced back and forth all throughout the week before finally closing down 18% at JD1.20. Jordan Kuwait Bank (JOKB) also made modest initial gains, but later shed them to close up only slightly at JD1.94.

The Union Bank for Savings and Investment (UBSI)'s AGM approved the company's financials for 2000, reporting earnings of JD0.312 million compared to JD2.91 million in the previous year. UBSI's chairman rejected speculation about possible merger talks with the Housing Bank for Trade & Finance (HSBK) and revealed healthy profits of JD0.9 million for the first four months of the current year. This seemed to please investors, as the stock closed up 14% at JD0.88.

Jordan National Bank (JONB) also released its official results for 2000, posting profits of zero, after net losses of JD16.75 million the previous year. Atlas will be conducting and publishing a full analysis of JONB's results.

Jordan Cement Factories (JOCM) made minute gains to close at JD2.88. This came as JOCM signed an agreement with Jordan's Construction Contractors Union under which the JCCU pledged loyalty to JOCM's products, which are expected to face competition from imports by year-end. Meanwhile, reports in local papers revealed that year-to-date exports to Palestine had slid to about 9,000 tons, or barely 15% of the exported amounts in the same period last year. JOCM aimed the finger of blame at Israel's stringent policies, saying they had obstructed its exports to the Occupied Territories, which historically swallowed up to 1,000 tons per day.

On the privatization front, the Council of Ministers approved the partial privatization of Royal Jordanian (RJ)'s Jordan Flight Catering Company (JFCCO). A British company, Alpha, went head-to-head with Spanish and Swiss companies in the bidding, and its offer to acquire 80% of JFCCO for US$20 million was approved. The move comes in the wake of RJ's successful efforts to spin off its Duty Free Shops and the Jordan Flight Training Company to Spanish and American companies, respectively.