Shares of Saudi Basic Industries Corp (Sabic) tumble in the kingdom as investors sell on the continued decline in oil prices and a decision by the bourse to change its structure. Sabic's stocks fell 8.96 per cent to 109.5 riyals (Dh107.4) - its lowest level in 11 months, while the TASI index heads to its biggest one-day fall since January, sliding 7.27 per cent to 7,881.54 points. Other notable casualties are Al-Rajhi Bank and Samba Financial Group - down 7.33 per cent and 6.58 per cent respectively.'
"Sabic is in the petrochemicals sector, so it is sensitive to the oil trade," says Hisham Tuffaha, head of research at Riyadh-based Bakheet Investment Group. Crude oil has tumbled from a record $147 in July and was trading on Friday at below $107, with London Brent crude down $2.21 to around $104. And while the Saudi market has removed regulatory barriers to allow foreign investment, aside from a brief spell the expected upturn has yet to materialise. Indicative of the climate was Dar al-Arkan Real Estate Development's share jump of 3.52 per cent - the only gain on the index. The increase came after the company issued one-for-three bonus shares to its holders.
Referring to TASI's slide, Mr Tuffaha said: "This is an unjustified decrease... most of the investors are not long-term and are not trading based on fundamentals. They sell shares after any change in the structure of Tadawul." Saudi Arabia's index has fallen more than 26 per cent since Jan 13, when it posted an 18-month high. * Reuters
