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Kenneth Ko

STOCK PRICES HAVE been on the bull run in Saudi Arabia, reflecting the ongoing strength of the economy and business growth.

The Saudi stock market continued its rally into this year,  up 29 per cent in the first half, with more than 2.14 trillion shares traded worth about US$57 billion.

The Tadawul All Share Index (Tasi) was up 76.2 per cent, to 4,437.58 points, last year.

The Tasi  was up 40 per cent at one point  this year, but then lost some of the gains and consolidated at lower levels in June.

The market picked up further momentum in recent months to gain more ground.

As of last week, the main index hovered around 6,400 points, meaning an accumulated increase of more than 40 per cent since the start of the year.

This year marks the sixth consecutive bull market for Saudi stock prices. The market rose 43 per cent in 1999, 11.3 per cent in 2000, 7.6 per cent in 2001 and 3.6 per cent in 2002.

According to Saudi American Bank (Samba), all the major sectors of the stock market showed strong gains in the first half of this year.

The banking sector, which comprises nine financial institutions,  accounts for the largest sector in the Saudi stock market, representing 30 per cent of  total market capitalisation.

In the first six months of this year, the sector was up 24 per cent,  a gain of 30 per cent last year.

Samba said the securities market had been awaiting the listing of Saudi Arabia's largest and only remaining privately held bank, the National Commercial Bank.

The telecommunications sector was the best performer last year, up 149 per cent. It added a further 27 per cent in the first half of this year.

Saudi Telecommunications Company  is the only listed form  in the sector and it comprises  21 per cent of the total market capitalisation.

Agricultural companies comprise less than 1 per cent of market capitalisation, being the smallest sector on the  Saudi bourse. But this sector, which includes nine traded companies, was up more than any other sector, gaining 65.5 per cent in the first half of the year, after an 81 per cent leap last year.

The services sector, which includes real estate, transport, construction and other companies, is the second smallest in terms of market capitalisation, representing just 4 per cent.

In the first half of the year, this sector was up 54 per cent, compared with a gain of 58 per cent for the whole of last year.

Industrial stocks enjoyed an increase of 43 per cent in the first six months, following on 101 per cent growth last year.

The sector makes up 22 per cent of total market capitalisation and is dominated by the petrochemical giant Saudi Basic Industries Corp (Sabic),  which alone accounts for 16.5 per cent of market capitalisation.

As a result, the industrial sector performance is highly dependent on Sabic, which gained 47 per cent in the first half, pulling the rest of the sector up with it.

The electricity sector was up 21 per cent between January and June, following a rise of 147 per cent last year.

The Saudi Electricity Company, formed as a result of the recent consolidation of 11 power  corporations nationwide, is the only company traded in this sector, which makes up 14 per cent of total market capitalisation.

Finally, the cement sector was up 6  per cent in the first six months.

It finished last year with the weakest performance among all sectors, but still with a gain of 28 per cent.

Samba said the cement companies were operating at near full capacity, reflecting the ongoing strength of construction in the kingdom.

The sector consists of eight cement companies and accounts for 7 per cent of total market capitalisation.



Bulls lead the charge when it comes to taking stock of the market