Predictably Volatile

Investors who had bought into the market a few months ago enjoyed the chance to claim their gains as many stocks, including blue chips, advanced, supported by heavy volumes. Despite the absence of major bloc deals, a total of 32.4 million shares worth almost JD67 million changed hands driving the AMI up another dizzying 6%.

The Amman Stock Exchange (ASE) is fast becoming a regional leader among its peers as it appears to be operating in a semi-vacuum environment. This situation allows the ASE to grow in spite of a global recession and mounting regional political tensions. The volatility of the market, however, seems to be steadily increasing as depicted by the market's 120-day standard deviation. Over the last nine months, the AMI's average volatility indicator grew about 12%, reaching its peak in 2003's second quarter at 0.008. On the other hand, the ASMI's standard deviation managed a smaller rise of 8% in the same period, retracting afterwards by 17% to its own 0.008 level. This reinforces the view that it is the large-cap companies that have driven both the pre and post Iraq war markets, consequently paving the way for smaller-caps.

The Arab Bank (ARBK) surprised everyone this week as it broke the JD260 barrier. Regional investors, who brought in liquidity to the ASE, helped the stock in its advance, allowing it to close at JD257.6, up 9%. The Housing Bank for Trade and Finance (THBK) managed to achieve double that growth in value, ending the week at JD4.42.

Qualifying Industrial Zones (QIZs) are still at the centre of attention, dragging along the way real estate companies that could be eyed by foreign investors as well. Jordan Industrial Resources (JOIR) led the pack, with a 25% hike to JD1.11, while Specialized Investment Compounds (SPIC) contented with a 19% climb to JD2.97. Beit Al- Mal Saving and Investment for Housing (BAMB), the biggest advancer, closed at its weekly high of JD3.48. Union Land Development Corporation (ULDC), which saw 0.875 million of its shares trade, witnessed a relatively modest climb of 9% to JD1.40.