Business | Markets
Tadawul dives on change in trading rules
Fall in company profits also helps pull down Saudi index to 8,706.77, its biggest one-day drop since January 22
- Bloomberg
- Published: 23:39 July 15, 2008
- Image Credit: Reuters
- A trader in Riyadh. The Saudi index has declined 21% so far this year.
Riyadh: Saudi Arabian shares declined the most in almost six months after the country's stock market regulator changed trading rules and as companies, including Bank Al Jazira, reported a decline in second-quarter profit.
"Investors are scared by any changes to trading rules even positive ones," said Abdullah Al Aqil, a trader at Samba Financial Group in Riyadh.
"Also several companies, such as Bank Al Jazira, reported disappointing earnings."
Saudi Arabia's Tadawul All Share Index lost 4.3 per cent to 8,706.77, its biggest one-day drop since January 22. The measure has declined 21 per cent so far this year.
The kingdom's stock market regulator said it plans to change rules so that some shares, depending on their price, will be allowed to move by 0.05 riyal and 0.10 riyal, instead of the flat 0.25 riyal. With the move, the bourse aims to better reflect changes to the stock price and increase liquidity.
Bank Al Jazira fell 9.9 per cent to 32 riyals, also its biggest one-day drop since January 22.
Decline in income
The smallest Saudi Arabian bank by market value said second-quarter net income slid 52 per cent to 99.9 million riyals ($26.6 million) as brokerage-fee income declined.
The Company for Cooperative Insurance fell to its lowest close since February 2005, tumbling 9.5 per cent to 73.75 riyals. The largest Saudi Arabian insurer by market value reported an 82 per cent drop in second-quarter net income as claims rose.
Saudi Research & Marketing Group declined 5.6 per cent to 42.5 riyals, its biggest one-day drop since March 29. The newspaper publisher said first-half profit declined 49 per cent after a one-time gain from selling its printing unit last year was not repeated.
Tabuk Agricultural Development Co slid 9.6 per cent to 35.25 riyals. The fruit and vegetable exporter's second-quarter net income fell 15 per cent on lower demand for its products, according to a statement posted on the Web site of the Saudi bourse.
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