Panic selling undermines gains on Tadawul

Riyadh: The Saudi stock market's performance was volatile last week as price falls played negatively on investor confidence, causing some panic selling.

However, the decline could enhance the attractiveness of blue chip companies that reached attractive price-earnings ratios varying between 13 and 17 times based on 2007 profits.

It increases the likelihood that these stocks will perform better in the coming days.

The Saudi stock market index increased 54 per cent between October and January 12, before the slump happened. Its rise created the perfect scenario for profit taking.

In other developments, Petro Rabigh was listed and started trading on January 27 within the industrial sector.

The stock held the largest trading volume ever in the Saudi stock market history with about 11 billion Saudi riyals, or 55 per cent of the total market volume, on the first day of trading. It climbed 149 per cent compared with its initial offering price.

Weekly close

The Tadawul All Share Index closed at 9,675.02 points on January 30, up 3.4 per cent from the previous week. Trading value reached 78.5 billion riyals, down from the previous week's 73.9 billion riyals.

Petro Rabigh dominated trading value at 41 per cent followed by Saudi Kayan at nine per cent and Sabic at five per cent.

The market is expected to be steady next week and will wait for any good news about the international economy.