Jordan Times
Sunday, September 17, 2006
weekly analysis: Amman Stock
Exchange
AMMAN — Share prices at the Amman Stock Exchange (ASE) declined this week amid a
correction that caused the market to retract part of its gains in recent weeks.
The ASE index finished the weekly trading session at 6317.9 points, a decrease
of 1.45 per cent . The market capitalisation stood at JD23,807,005,664.
The country’s trade balance deficit widened by 7.9 per cent to reach JD2,613.9
million during the first seven months of the year, compared to the same period
last year. Moreover, the consumer price index rose by 6.3 per cent year-on-year
during the period between January and August.
On a different note, the Japanese government extended an $11.3 million grant to
Jordan to support the country’s balance of payments as part of the Japanese
Non-Project Grant Aid programme.
In other news, the Securities Depository Centre (SDC) announced the success of
its trials to connect the local stock market with the Dubai and Abu Dhabi
bourses, amid efforts to enable common listing between the exchanges. On the
trading floor, average daily trading volume decreased by 14.7 per cent reaching
JD60.898 million. Overall, decliners outnumbered advancers as 87 companies out
of 167 declined, while 67 companies advanced.
In the banking sector, the index declined by 1.59 per cent to finish the week at
12,512.6 points, affected by the 1.86 per cent drop in the heavyweight Arab
Bank’s (ARBK) share price which closed at JD25.31. Jordan National Bank (JONB)
signed a strategic partnership agreement with Abraaj Capital - UAE, after 8
million JONB shares were allocated to the company, bringing its stake in the
bank’s JD110 million paid-up capital to 10.7 per cent.
The partnership falls in line with the bank’s efforts to expand into regional
markets, both in terms of banking operations, as well as listing its shares in
the UAE bourses. JONB’s share price closed at JD3.05 up by 3.39 per cent, while
the share trades at a P/E multiple of 12.72x based on our earnings forecasts for
2006
In the insurance sector, a forum of Arab insurance regulatory commissions was
established with the participation of 12 Arab countries including Jordan.
Jordan’s Insurance Commission will head the forum, which aims to enhance
cooperation and ties between the regulatory agencies.
In terms of trading volume, Arab American Takaful Insurance (ARAI) was the most
heavily traded stock, accounting for 81 per cent to the sector’s total trading
volume. ARAI’s share price closed at JD2.16, slightly up by 0.93 per cent.
In the services sector, United Arab Investors (UAIC) signed a memorandum of
understanding to participate in a consortium of Arab and foreign companies in a
tender offer to develop, expand, and manage Queen Alia International Airport’s
various trade and services locations.
UAIC’s share price finished the week at JD3.54, down by 8.53 per cent. Investors
& Eastern Arab for Industrial & Real Estate Investments (IEAI) signed a
memorandum of understanding with Babel Contracting Establishment through which
the establishment will construct buildings and metal hangars for the Al-Mushatta
Industrial City project near the airport.
Furthermore, Middle East Diversified Investment Company’s (MEDI) 2 million
shares were listed in the second market on Wednesday. MEDI’s share price closed
at JD4.01, up 1.52 per cent from the opening price on its first day of trading.
Noteworthy is that Jordan Securities Commission (JSC) approved the registration
of Jordan International Investment Company’s shares, while it rejected the
registration of First Jordan Investment Company’s and Arab American Brokerage
Company’s shares. As for the industrial sector, Jordan New Cable Company (JNCC)
signed a contract to supply Saudi Electricty Company with SAR93 million worth of
electric cables. JNCC’s share price rose by a slight 0.87 per cent to close at
JD5.80.