Saudi stocks may bounce back on liquidity

23 Oct, 2005

High liquidity may push the Saudi bourse back up in the coming week, after blue chips had eased on results reflecting slower earnings growth, analysts said.
The index of the Arab world's biggest stock market closed the week down 0.7 percent at 14,952 points. It is still 82 percent up for the year on a booming economy and strong liquidity fuelled by high oil prices.
Saudi Basic Industries Corp, the most active share last week, dropped 7.5 percent. It had posted a 54 percent higher nine-month net profit of 14.7 billion riyals ($3.92 billion), but third quarter earnings were just 2 percent up on the previous quarter.
"After all blue chips have announced their results for Q3 2005, it becomes clear that their earnings' growth rate for the first nine months in 2005 compared to the same period in 2004 (38 percent) has declined noticeably from the previous year (49 percent)," Bakheet Financial Advisors said.
Banks, many with strong earnings, gained in the week, led by Saudi British Bank which announced plans for a capital increase after posting a nearly 51 percent higher nine-month net profit. Its shares climbed 15.5 percent to 1,470 riyals.

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