Blue-chip shares pull ASE back

(Photo: ASE website)
AMMAN — The prices of the majority of blue-chip shares in Amman Stock Exchange (ASE) dropped on Tuesday, with the index closing at 1,778.43 points registering a drop of 0.47 percent.اضافة اعلان

Tuesday’s trading session was weak in terms of turnout, coinciding with the first day of the holy month of Ramadan, during which many investors prefer not to expand or speculate, particularly since listed mega companies have distributed cash dividends, and are hence starting to feel the decline, the last of which was the Arab Potash Company (APC), which has declined for the second day in a row, to reach the minimum permitted price level of JD20.76 per share.

Poor turnout for financial expansion was evident, as the trading value for Tuesday reached JD5.3 million, where 5.4 million shares were traded through 2,333 transactions.

Comparing the closing prices of the 82 traded companies with their previous closing prices, the shares prices of 19 companies rose, while those of 35 declined.

At the sector level, the Industrial index decreased by 1.58 percent, the financial index decreased by 0.25 percent, and the Services index decreased by 0.18 percent.

The state of decline witnessed in the ASE has the same context as declines hitting the financial markets of many countries, according to a report by Kamco Invest on the profits of companies listed in the stock exchanges of Arab Gulf countries during the fourth quarter of the year 2020-2021, as the profits of Gulf companies have reached their lowest levels in five years, due to the performance of the energy, banking and real estate sectors.

The poor performance of companies is attributed to the unprecedented impacts of the COVID-19 pandemic, the ramifications of which were reflected on the economy of Gulf Cooperation Council (GCC) countries, impacting the fiscal statuses of companies and governments.

Profits declared by listed GCC companies, the lowest in five years, amounted to $91.3 billion in 2020, compared to $150.5 billion in 2019. This decline, standing at 39.3 percent and equivalent to $59.2 billion, is mainly attributed to the drop in ARAMCO’s revenues, valued at $38.9 billion, which is equivalent to an annual drop of 44.1 percent, and closely followed by banking, real estate, and raw material sectors.

Those three sectors contributed to some 85 percent of the drop in annual net profits of companies, excluding the net profits of ARAMCO.

By excluding the financial data of ARAMCO, dubbed “the oil giant”, the decline in GCC companies’ net profits is relatively lower, amounting to 32.6 percent.