Jordan Times
Sunday, March 18, 2007
weekly analysis: Amman
Stock Exchange
AMMAN — Prices of shares at the Amman Stock Exchange (ASE) dropped for the
second week in a row, with the banking sector index recording the steepest
decline. The ASE index closed out the week at 6185.8 points, a decrease of 1.72
per cent. Market capitalisation stood at JD23.6 billion.
According to the Ministry of Finance, the government’s budget deficit narrowed
by 6.9 per cent during 2006 to JD443.6 million, representing 4.4 per cent of the
year’s gross domestic product (GDP). This compares to a budget deficit of
JD476.8 million, or 5.3 per cent of GDP a year earlier.
The lower budget deficit came as a result of the 23.5 per cent increase in
domestic revenues, which more than offset the 39.2 per cent decline in foreign
grants during the year.
The Department of Statistics reported positive results this month, including the
3.9 per cent drop in the trade deficit to JD336.7 million during January 2007.
Other economic news showed a mere 3.25 per cent growth in construction activity
in 2006, compared to 23.1 per cent and 22.5 per cent in 2005 and 2004
respectively.
On the Amman bourse trading floor, the average daily trading volume fell by 23.2
per cent to JD37.6 million. Overall, decliners outnumbered advancers as 99
companies out of 179 declined, while 60 companies advanced.
In the banking sector, the Social Security Corporation (SSC) and Arab Bank came
to an agreement regarding the share price to be paid by the SSC for two million
of Arab Bank’s 5.7 million treasury shares intended for sale.
Arab Bank board of directors announced that negotiations with a potential
strategic partner to increase the bank’s paid-up capital by 10 per cent came to
an end as the parties failed to reach an agreement concerning the share purchase
price. Arab Bank’s share price closed at JD24.90, down by 2.96 per cent.
Under an agreement signed with the Housing and Urban Development Corporation,
Bank of Jordan will extend housing loans to enable limited-income citizens to
purchase and build residential units as part of the corporation’s projects. Bank
of Jordan’s share price finished the week at JD3.31, down by 2.36 per cent.
In the insurance sector, the general assembly of Jordan International Insurance
Company approved the distribution of 3.5 million bonus share. However, the
companies’ comptroller expressed reservations over the distribution as a large
portion of the company’s income represents unrealised gains. The share price of
Jordan International Insurance closed at JD1.85, down by 7.50 per cent for the
week.
In the services sector, Arab Real Estate Development Co. announced that Sheikh
Nahyan Ben Mubarak Al Nahyan purchased 1.5 million of the company’s shares to
enter as a strategic partner with a 7.5 per cent stake. the company’s share
price increased by 4.70 per cent to close at JD2.45.
Jordan Duty Free Shops reported net income of JD5.2 million for 2006, an
increase of 25 per cent from the JD4.1 recorded in 2005. The company’s general
assembly approved a 60 per cent cash dividend worth JD3 million to shareholders.
The share price of Jordan Duty Free Shops closed at JD9.70, down by 2.81 per
cent.
Century Investment Group achieved JD1.06 million in net income for 2006, a
year-on-year growth of 13.6 per cent.
As for the industrial sector, profits of Jordan Phosphate Mines grew by 54.8 per
cent during 2006 to JD16.1 million. The company’s board of directors proposed
the distribution of JD7.5 million as cash dividends. The share price of Jordan
phosphate ended the week at JD4.35, up by 0.93 per cent.
The general assembly of Union Tobacco and Cigarettes Industries general approved
a 40 per ecnt cash dividend distribution, as the company registered net profit
of JD7.2 million last year. Union’s share price dropped by 5.48 per cent, to
close at JD5.69.