Jordan Times
Sunday, March 5, 2006
weekly analysis: Amman Stock Exchange
AMMAN — The Amman Stock Exchange (ASE) index
declined for the third week in a row in a correction that drove the market down
by 16.8 per cent over the past three weeks. This has triggered margin calls,
thus intensifying market losses. The index closed at 7263 points, down by 7.18
per cent for the week. The market capitalisation stood at JD25,227,164,242
The Securities Commission will enforce the new rules and regulations governing
margin trading as of March 15. This is expected to boost up liquidity levels in
the ASE. The average daily trading volume stabilised at around JD50 million for
the week. Overall, decliners outnumbered advancers as 128 companies out of 153
declined, while 21 companies advanced.
In the banking sector, Housing Bank For Trade and Finance's extraordinary
general assembly approved the increase in capital from JD100 million to JD252
million through a private placement of 100 million shares at JD4 per share along
with a 50 per cent stock dividend, in addition to the allocation of 2 million
shares as treasury stock.
During the Saturday meeting, the chairman of the bank indicated that the
increase in capital would be used to fund regional expansions.
On the other hand, the extraordinary general assembly meeting of Jordan Kuwait
Bank (JOKB) approved the increase in paid up capital to JD60 million through a
50 per cent stock dividend. JOKB's chairman left the door open for a further
increase in capital this year in order to achieve target growth while
maintaining its financial ratios at comfortable levels.
Meanwhile, Jordan Commercial Bank announced a net profit of JD13 million
compared to JD3.7 million in 2004, an increase of 254 per cent. In the insurance
sector, Yarmouk Insurance & Reinsurance announced a net profit of JD3.7 million
last year, most of which came from investments in securities.
In the services sector, Union Investment Corporation's (UINV) EGM disapproved
the board of directors' recommendation to raise capital by 50 per cent. Instead,
the EGM approved a 25 per cent cash dividend. Meanwhile, Jordan Press Foundation
(PRES) announced a profit of JD11.7 million for 2005, a growth of 81 per cent
compared to 2004. PRES's board of directors announced its intention to
distribute a 90 per cent cash dividend and a 25 per cent stock dividend, thus
raising paid up capital to JD7.5 million.
On a different note, Amwal Invest's (AMWL) share price underperformed investors'
expectations as it dropped below its opening price of JD4.00 by 18.5 per cent
closing at JD3.26, in line with the market's downward trend.
As for the industrial sector, Union Tobacco & Cigarettes Industries (UTOB)
announced a net profit of JD7.5 million for 2005, an increase of 77 per cent
from 2004 levels.
UTOB's board of directors revised its cash dividend proposal from 30 to 40 per
cent. The company's share price dropped by 6.3 per cent this week to close at
JD7.02.