Saudi stock exchange delivers 16% boost in H1

SHARES BOOST: The Saudi stock exchange was up 16 percent in the first half of 2009. (Getty Images)

Insurance companies were the biggest gainers on the Saudi stock exchange in the first half of the year, while telecom firms and banks underperformed.

The Tadawul All Share Index was up 16.52 percent in the year to date at Tuesday’s close, helped by a recovering oil price, after losing almost half its value in the second half of 2008.

Arabian Business has tested the index's performance so far this year by investing an imaginary $100,000 at the beginning of 2009 into each of the companies listed on the All Shares Index.

Companies in the expanding but still fragmented insurance sector dominated the top 15 gainers, mirroring gains on the Dubai Financial Market (DFM) in the same period.

The best performing stock, Al Sagr Company for Cooperative Insurance, increased more than three-fold in value.

Fears that global financial turmoil has spread to the Kingdom weighed on banks, with index heavyweight Samba Financial Group falling by 18.4 percent.

Other losers included companies in traditionally defensive sectors such as dairy giant Almarai, which rose 11.25 percent but underperformed the wider index, and diversified food manufacturer and supermarket operator Savola Group, which lost 8.1 percent of its value.

Savola’s oil and sugar manufacturing businesses have been badly hit by a drop in global commodity prices, and investor uncertainty over some of its real estate projects.

Companies in the increasingly competitive telecom sector were also among the laggers, with Saudi Telecom and Zain Saudi Arabia rising by only 4.9 percent and 10.3 percent, respectively.

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