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Last week the Saudi Arabian stock market ended 4.2% lower and closed at 4,371.27 points, down from an all-time high of 4,563.21 points a week earlier.
Monday was a particularly black day with a 6.5% fall, the bourse's worst ever trading day. However, market watchers had been expecting a correction of this size.
Only a couple of weeks ago Bakheet Financial Advisers warned that the market was overheating with very high trading in a few speculative stocks.
The trigger for last week's fall appears to have been a research report saying that Saudi Telecom shares should be at 411 when they were trading at 430. But brokers said the market had risen so far that traders were looking for any excuse to take profits.
They noted that institutional investors were not really involved in the sell-off, although Blue Chip stocks took quite a tumble. STC closed at 411.75, while SEC lost 6.8% and Sabic was down 4.6%.
However, the Saudi bourse is still up by 73.6% this year, making it one of the best performing stock markets in the world.
Saudi bourse has a sharp correction
Profit taking by investors sent the Saudi bourse into a downward spin last week. But this is probably just a correction to a bull phase rather than the start of a bear market.
Saudi Arabia: Saturday, September 20 - 2003 at 14:35
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Peter J. CooperSaturday, September 20 - 2003 at 14:35 UAE local time (GMT+4)
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