Jordan Times
Sunday, December 18, 2005
Weekly Analysis
Amman Stock Exchange
AMMAN — The Amman Stock Exchange Index (ASE) witnessed a correctional phase
after the previous increase in overall share prices, declining for the fourth
week in a row. Selling pressure increased as investors shifted focus to the
various private subscriptions which have absorbed much of the market's
liquidity. The index closed at 8275.90 points, down by 5.46 per cent. The market
capitalisation stood at JD26,888,650,120.
GDP figures for the third quarter of 2005 showed
a 7.2 per cent growth at constant prices and an 11.5 per cent growth at current
prices compared to the third quarter of 2004. Moreover, the country's trade
deficit for the first ten months of the year reached JD3599.3 million,
representing 48.1 per cent increase compared to the same period last year.
As for trading levels, total trading volume increased by 3.28 per cent during
the week to reach JD271.6 million, including three block deals on the shares of
Union Bank for Saving and Investment (UBSI), Arab Real Estate Development (ARED),
and Jordan Industrial Resources (JOIR), amounting in total to JD22.3 million.
Overall, decliners outnumbered advancers as 114 companies out of 150 declined,
while 31 companies advanced.
In the banking sector, the index fell by 6.59 per cent to 17187.6 points, while
the heavyweight Arab Bank (ARBK) stock price closed at JD65.20 showing a 6.86
per cent decline. In the insurance sector, new regulations have increased
minimum capital requirements, where companies providing both life insurance and
general insurance must increase their paid up capitals to JD8 million by Dec.
31, 2007. As for companies that provide only life insurance or general
insurance, the minimum capital requirement is JD4 million and must be reached by
Dec. 31, 2006. The new requirements also prohibited any new company from
providing both life and general insurance together, while setting the minimum
requirement for new companies at JD8 million. The insurance sector index
declined by 3.06 per cent to reach 7129.6 points.
In the services sector, the government has delayed selling its remaining 41.5
per cent stake in Jordan Telecom (JTEL). The company announced that listing the
shares either on the ASE or in other Arab stock markets is one of its options in
terms of the privatisation process, bearing in mind that Dubai's DIFX is a more
likely choice.
JTEL's share price rose by 2.04 per cent closing at JD5.50. In other news,
Transport and Investment Barter Company (NAQL) listed its 8 million shares on
the ASE on Wednesday, of which 900,000 are traded and the remaining 7.1 million
are suspended from trade.
NAQL's net income for the first nine months of the year reached JD1.14 million,
and during its two days of trading, the share price rose to JD3.85. As for the
industrial sector, Ready Mix Concrete and Construction Supplies' (RMCC) board of
directors announced its plans to set up a new shipping company with a paid up
capital of JD10 million in which RMCC will hold a 30 per cent stake. RMCC's
share price fell by 15.3 per cent to close at JD3.82.