January 11th, 2007, 07:36 AM
Saudi shares fall 2.86%
The Saudi stock market fell 2.86% on Wednesday as the Tadawul All-Share Index slumped to its lowest level in two years, Arab News reported. The region's largest bourse has dropped 4.71% in its first five trading days for 2007. Banks were the hardest hit, with investors expecting most to report weak earnings for 2006.
January 11th, 2007, 11:30 AM
I would expect further corrections in the Saudi market, given the fact that it is still overpriced. For example. The PE (price to trailing earnings) ratio in the UAE is 12.9, while on the other hand, in Qatar and in Saudi Arabia that same ratio is 18.7 and 17.3.
At this moment, the most attractive markets to invest in, in the GCC region are Kuwait, and Oman whose ratio's stand at 10.6 and 10.5 respectively. Followed by the UAE and finally Saudi Arabia and Qatar.
Saudi Arabia and Qatar are probably going to see further declines in their stock markets unitl they come inline with the rest of the gulf countries. At ths current stage they are still overvalued.
But in my personal opinion, I believe that the cycle of neck breaking collapses is nearing to an end. Many of the small time investors that drove the market to rediculous highs have withdrawn, we are now left with the long term institutional investors and the government which are more than likely NOT going to pull out.
I think that the markets will eventually rally back in the near future, but most probably no where near what we saw in the last three years, probably something more realistic.
In addition, unlike the market crashes that affected the US and Europe a while back, the capital market crashes in the Gulf region are probably going to have a limited impact on the economy, given that and expansionary private sector and huge government expenditures on infrastructure upgrades will more than compensate.
Most likely, the only segement of the market that will be affected, will be the luxury retail segment, and I believe that, that will also rebound soon, since economists have made it clear that they expect consumer sentiment and spending to rebound fairly quickly.
January 14th, 2007, 08:08 AM
Thanks, for your nice reply. Realy it's going hard to hard for the market value if you have more things to say just say.....