GulfBase GCC Cap Indices
Large Cap3,991 -0.08
Med Cap3,831 -0.01
Small Cap4,863 -0.26
Micro Cap8,466 0.09

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Ticker Price Volume
GFH 0.49 1,642,170
QNBK 133.5 133,285
AMLAK 1.07 4,593,610
DSI 0.37 10,758,890
SABIC 97.69 2,746,187
BKMB 0.37 624,000
AIRARABIA 1.13 3,611,365

Market Review and Outlook

Source: NCB Capital

Saudi Macro and Equity Market

Saudi Corporate Earnings Reveal Strength

Saudi corporate earning announcements continued last week, with 110 of the 132 listed firms on the Saudi Stock Market last year, having disclosed their results. The combined net-profit of the firms rose 25.6% to SAR57.73 bn in 2009, from SR45.97 bn the year before. This constituted an approximate 47% decline from the high figure of SR86.54 billion attained in 2007. Excluding the profitability of the 11 listed Saudi banks, the combined net-profits rose strongly by 63.9% Y/Y to SAR35.5 bn in 2009, even though the main contributor SABIC's net-earnings have dropped nearly 59% last year. The netprofits of the listed banks declined 8.6% to SAR22.22 bn in the FY09 largely on credit related provisions. However, with NCB’s strong positive outcome, the Kingdom's banking sector's earnings plunge moderated to 0.3% down to SAR26.3 bn in FY09. The 60.3% drag in petrochemical earnings was largely due to prices in the international markets that affected SABIC profits. The companies largely influenced by domestic economic activities were the biggest gainers, with agriculture sector showing 62% earning growth in FY09, followed by industrial investment (23.5%), hotel & tourism (211%) and the retail sector (6%). Overall, the FY09 corporate results have been better than most investors have had expected

US Macro and Equity Markets

US Financial System “Payback Time”

Is it time to get tough with a financial system that pummeled the global economy and the US? Apparently, Barack Obama had decided it is payback time, proposing a plan to impose a Financial Crisis Responsibility fee. The tax or fee would be imposed on 50 major financial firms including bank holding companies and some insurers. The administration estimates the tax will raise USD90 bn over 10 years and USD117 bn over 12 years, equal to losses from the federal government’s Troubled Asset Relief Program (TARP). The levy would apply to firms with more than USD50 bn in assets and would exclude Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders that had to be taken over by the government. It seems the massive profits, better-than-expected earnings as well as the record bonuses, which US banks had announced was the last straw. Obama's administration had been viewed in a negative sense during 2009, with most taxpayers angry at a government that, in their opinion, was subsidizing Wall Street bonuses and ensuring their survival at the expense of the general public. More Importantly, the plan proposed forbidding banks with insured deposits to engage in proprietary trading solely for their own profit or investing in hedge funds. Indeed, Obama’s plan if approved by the Congress will send a clear signal that the safety net that taxpayers provide can not be used to trade for profit.

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