Saudi Shares Rise to Four-Month High on Oil, Emaar City Gains
May 28, 2011, 9:43 AM EDTBy Mourad Haroutunian
May 28 (Bloomberg) -- Saudi Arabian shares rose to the highest level in four months as oil prices gained after leaders of the Group of Eight nations said the global economy is strengthening.
Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, and National Industrialization Co. led the gains. Emaar Economic City gained the most in almost three years.
The 146-member Tadawul All Share Index climbed 0.4 percent to 6,751.11, the gauge’s highest level since Jan. 17, at the 3:30 p.m. close in Riyadh. Three shares rose for every stock that dropped and the index rallied for a third day, extending quarterly gains to 2.9 percent.
“Recent negativity out of Europe is being shrugged off by local investors as the return of oil above $100 is at the forefront of investor minds,” said Amro Halwani, a senior trader at Shuaa Capital PSC in Riyadh. “This is keeping Saudi petrochemical equities on high demand.”
Crude oil for July delivery gained 0.4 percent to settle at $100.59 a barrel on the New York Mercantile Exchange. Brent oil for July settlement was settled at $115.03 a barrel. Saudi Arabia holds one-fifth of the world’s proven oil reserves.
Sabic gained 0.5 percent to 107.75 riyals, the highest price since May 22, after Chief Executive Officer Mohamed al- Mady said the company plans to expand in China and Saudi Arabia this year. National Industrialization gained 1.2 percent to 42.20 riyals, its highest price since July 8, 2006. Al Rajhi rose 0.3 percent to 76 riyals.
“The market remains very prone to volatility as speculators continue to dominate the flows on mid and small cap companies,” said Halwani.
Emaar Economic, a unit of Dubai’s Emaar Properties PJSC, rose 9.5 percent, its largest gain since Nov. 29, 2008, to 8.10 riyals, after raising 5 billion riyals ($1.3 billion) from the Saudi government to finance construction of real-estate projects in the kingdom.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
--Editors: Digby Lidstone, Sara Marley.
To contact the reporter on this story: Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net
To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net
