Jordan Times
Sunday, May 27, 2007
weekly analysis: Amman Stock
Exchange
AMMAN — The index of the Amman Stock Exchange (ASE) dropped last week, driven
down by the heavy weight Arab Bank share price. The index closed on the last day
of trading at 5791.16 points, a decline of 1.68 per cent.
Market capitalisation fell by 1.46 per cent last week to JD22.4 billion.
Real estate and services were the only two sectors whose indices recorded gains
as they increasing by 0.91 per cent and 0.78 per cent respectively.
The diversified financial sector was the biggest loser as its index recorded a
loss of 2.35 per cent by the end of the week amid low trading volumes.
As for trading activity, 14.649 million shares exchanged hands while average
daily trading value rose by 12 per cent to JD34.1 million. Overall, decliners
outnumbered advancers as 86 companies out of 181 declined, while 82 advanced.
In terms of value traded by sector, the real estate sector came in first place
accounting for 35.1 per cent of the total value traded followed by the banking
sector with 18.6 per cent. The services sector accounted for only 18.4 per cent
of the value traded last week.
Shares of Int’l Arabian Development and Investment, Ittihad Schools and Tameer
Jordan were the most actively traded last week for a combined value of JD14.978
million accounting for 8.78 per cent of the week’s total value traded.
Additionally, several block deals were executed during the week; the most
significant were deals on shares of Jordan Ahli Bank, Middle East Complex and
Tameer with transaction values of JD10.04 million, JD8.39 million and JD2.25
respectively.
During the World Economic Forum, Jordan signed 24 strategic business agreements
valued at over $2.5 billion. The investment agreements were signed with
companies from the United Arab Emirates, Saudi Arabia, Kuwait, Turkey, the US,
Ireland, France, the UK, Japan, China and India covering energy, transportation,
finance and light industry sectors.
The government will launch a JD8 million development scheme this year to tackle
poverty in 16 of the country’s most impoverished communities. The plan will
involve upgrading infrastructure, training and capacity-building, and funding
income-generating activities.
Arab Bank acquired 10 per cent of Al Faris National Company for Investment and
Export and has become a strategic partner. The bank’s share price closed at
JD22.45, down by 3.32 per cent, while the company’s share price closed up by
6.29 per cent.
During a chain of several big block deals on shares of the Jordan Al Ahli Bank,
Byblos Bank (Lebanon) acquired a strategic share which is on the rise. So far
they have gained 10 million shares which comes to 9.4 per cent of the paid up
capital (JD110 million). The share price of Jordan Al Ahli Bank closed at JD3.18
up by 0.95 per cent.
Jordan Cement Factories suddenly raised the price of cement by JD4- JD8 per
tonne. The company attributed the rise to the hike in fuel oil price (by 12 per
cent) which constitutes 70 per cent of the total production cost.
Other reasons for the rise were the cost of labour which increased by five per
cent and the rise in the inflation rate from last year reaching 6.25 per cent.
The share price of the cement company dropped by 3.52 per cent to close at
JD12.05 whilst trading at a forward P/E multiple of 21.7x.
Middle East Complex for Engineering, Electronics and Heavy Industries attracted
the UAE company Al Mal Capital as a main strategic partner with 10 per cent of
its shares resulting in the two UAE companies having a combined share of 22 per
cent.
In addition, a main local partner “Ein Al Ghad” acquired 10 per cent as well.
The company’s share price dropped by 6.9 per cent to close at JD2.16.