Jordan Times
Sunday, March 12, 2006
weekly analysis: Amman Stock
Exchange
AMMAN — The Amman Stock Exchange (ASE) recuperated the losses it incurred during
the first two trading sessions, as increased buying orders pushed the index up
by 4.42 per cent to finish the week at 7584.3 points.
Meanwhile, bearish sentiments escalated as the index declined by 8.47 per cent
during the first two days of the week to reach a 9-month-low, falling below the
7000-point barrier. In efforts to boost up trading activity, Jordan Securities
Commission (JSC) issued new regulations allowing companies to repurchase 5 per
cent of their issued shares as treasury stock, while enabling companies to buy
up to 10 per cent of their shares, provided prior approval from the JSC. Under
the new regulations, companies are required to hold repurchased shares for a
minimum of six months and a maximum of 18 months from the date of the initial
purchase.
Furthermore, the Central Bank of Jordan (CBJ) issued similar regulations
permitting banks to purchase 5 per cent of their shares, such that capital
adequacies and liquidity positions are maintained at comfortable levels. On the
trading floor, average daily trading volume increased by 5.47 per cent to reach
JD52.8 million for the week. Overall, advancers outnumbered decliners as 117
companies out of 159 advanced, while 34 companies declined.
In the banking sector, the index advanced by 4.73 per cent reaching 15,495.8
points, buoyed by the 4.39 per cent increase in the heavyweight Arab Bank's (ARBK)
share price, which closed at JD32.35.
Three block deals were executed on 35,390 ARBK shares, amounting in total to
JD1.026 million. Moreover, Export & Finance Bank (EXFB) was the star among its
sector in terms of growth in share price as the bank's share closed at JD3.03,
up by 14.8 per cent. In the insurance sector, the index finished the week at
6923.7 points, up by 5.28 per cent. Arab America Takaful Insurance's (ARAI)
share price increased by 13 per cent to close at JD2.17, amid active trading
which accounted for 49.5 per cent of total trading volume for the sector.
The services sector witnessed increased trading activity, enabling 50 out of 66
traded companies to advance. United Arab Investors' share price witnessed a
weekly growth of 3.93 per cent, to close at JD2.91 after declining to a low of
JD2.53 last Monday. On a different note, National Portfolio Securities Company (NPSC)
signed a strategic partnership agreement with Saudi-based Al Masarif Trading,
Industrial, and Investment Corporation in order to establish a brokerage company
in Saudi Arabia with a total capital of SR100 million, in which NPSC will hold a
30 per cent stake. In the industrial sector, Jordan Chemical Industries' (JOIC)
board of directors proposed a 10 per cent increase in capital through the
distribution of stock dividends, in addition to a 25 per cent cash dividend
distribution.
As part of its privatisation programme, the government of Jordan signed an
agreement to sell 37 per cent of its 65.6 per cent stake in Jordan Phosphate
Mines to the Brunei Investment Agency at a price of JD2.8 per share, which is 33
per cent below the stock's last closing price of JD4.18 before its suspension
last Sunday.
Furthermore, Jordan Steel (JOST) signed a memorandum of understanding with Al
Hamad Construction & Development Co. through which JOST will supply the Royal
Village project with around 50,000 tonnes of steel.