Declines in the Saudi stock market push 65 companies to trade without their nominal and book values


Declines in the Saudi stock market since the end of last January or its highest levels in the year led to a decrease in the profitability repeaters of the listed shares and the trading of some stocks without their book values ​​and nominal values, as the repetition of the earnings per share decreased to 18 times compared to the end of last year at 19.5 times.
According to the analysis of the reports unit in the “Al-Iqtisadiya” newspaper, based on the data of the listed companies through “Tadawul”, 65 listed companies are trading without their nominal and book values, according to the closing of the Wednesday session.
About 37 companies are trading below the book value, while 28 companies are trading below their nominal value of “ten riyals”, after the stock market fell by 12 percent from the highest level in January.
The recent Saudi stock market declines may generate investment opportunities in the market for many companies, after taking the companies ’evaluation of their business results and according to the overall financial indicators, not in nominal terms or the book value alone.
Real estate fund and petrochemical shares units led the companies that traded below their book value of 37 companies out of 194 companies and real estate funds listed on the stock market.
Dar Al-Arkan leads these companies by trading at the price of 9.75 riyals according to the closing of the Wednesday session, while the book value is 17.5 riyals, and also the Feasibility Fund of the Two Holy Mosques comes secondly at trading at the level of 7.6 riyals compared to the book value of 10.81 riyals, while the Mifk Reet fund comes third, which trades at 7.65 riyals compared to the book value of 10.4 riyals.
As for companies that trade below their nominal value, they are also led by real estate funds units, while the shares of Kingdom Holding Company are the most prominent companies that trade below their nominal value at 7.08 riyals.
It is known that the book value is the net value of the company’s assets, or total assets after deduction of liabilities, and by comparing the book value of the company with its market value, the investor can determine if the share price is higher or less than its fair value, and whenever the investor bought the stock at a value close to its book value, that was Better in terms of investment “it is not necessarily tempting to buy”, because the value of the paid share is covered and secured by the available assets of the company, while the nominal value is known as the share value when establishing the company of ten riyals.
* Economic Reports Unit


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