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Saudi stocks fluctuate with new listings and IPOs

The Saudi market continued to fluctuate from last week, despite the Basic Chemical Industries Initial Public Offering (IPO) and the listing of Re-Insurance, which rose by 105%.

The Basic Chemical Industries (BCI) IPO began today on 30% of its shares, priced at SR30 per share. The nominal value of each share was set as SR10.

The day’s trading session started with a slight rise, which lasted for just 15 minutes before the market plunged, closing the day down by 0.07%, and so continuing the downward trend for a second consecutive week.

The newly listed Re-Insurance shares topped the index in terms of quantity and value, with 52.4 million shares traded out of the total 237.4 million shares traded in the market.

In total SR1bn of shares were traded today. Opening at SR10 in the morning, Re-Insurance shares closed at SR20.50, an increase of 105%.

Market fluctuation

But fluctuation is the watch word in the market. A severe decline in share prices was seen late in the trading day. SAMBA dropped by 4.5%, Riyad Bank by 1.8%, SABB by 1% and Bank Al Jazira by 1.2%.

Cairo-based EFG-Hermes Group’s report stating that banks’ share prices were generally fair did not help stop their decline. At the same time, the leading shares in the petrochemical sector rose. Sabic increased slightly by 0.54%, Saudi Kayan by 0.99% and Nama Chemicals by 1.6%.

The Electricity Company’s share price rose 3.9%, backed by EFG-Hermes’ recommendation to portfolio mangers to buy big quantities of the share.

According to a report by Bakheet Investment Group, the fluctuation in the Saudi stock market is due to investors waiting for Inmaa Bank to list, which negatively affected the banking sector with it reporting the worst performance.

Nevertheless, a report by Jadwa Investment has set the fair value of the Saudi stock market’s index by 10,000 points and it is expected to rise by the end of this year to 12,000 points with an increase of 20% based on first quarter profits reported by companies.

The report said that the index will be backed by the construction and real estate sectors, whose companies are expected to achieve high profits this year.