Bisha scandal rocks Saudi trading week

Riyadh: The Saudi Tadawul All Share Index (TASI) started the past trading week with a sharp decline of 4.6 per cent in reaction to the suspension of Bisha Agricultural Development Co's trading.

Analysts attributed the decision of the Saudi Capital Market Authority (CMA) to the initial financial results announced by the company in November 2006, which showed a profit of 51 million Saudi riyals for the first nine months of 2006.

In December, CMA asked the company to republish its financial statements for the same period.

The revised results revealed a 22.2 million riyal loss or 96 per cent for the first nine months of 2006.

The CMA's decision has affected the market, sending ripples of fear that other distressed companies may face the same situation.

This was reflected in investor apprehension that the market may fall further. Consequently, blue chip companies in addition to small companies suffered sharp falls.

The CMA agreed to Saudi Industrial Investment Group increasing its capital to 4,350 million riyals, allocating 50 per cent for current shareholders and the other 50 per cent for public subscription.

Also, the CMA has announcing the forthcoming of public subscriptions for Malaz insurance and Reinsurance Company and Mediterranean and Gulf Cooperative Insurance and Reinsurance in February.

On January 20, Poly-propylene Co shares will debut in the services sector of the market.

The TASI closed on Wednesday at 7,215, down 4.6 per cent from the previous week and 9 per cent lower since the start of the year, with lower turnover reaching 43.4 billion against 5.6 billion Saudi riyals last week.