Bloomberg News

Saudi Shares Reach Three-Month High on Europe Leadership Changes

November 13, 2011

Nov. 12 (Bloomberg) -- Saudi Arabian shares rallied to their highest level since August as post-Eid investors reacted to leadership changes in Greece and Italy.

Banque Saudi Fransi, a lender part-owned by Credit Agricole SA, gained more than 2 percent, while Jarir Marketing Co., the kingdom’s largest stationery and book seller, jumped to a record. Saudi Basic Industries Corp., the world’s largest petrochemicals producer, also advanced.

The 149-company Tadawul All Share Index rose 0.6 percent to 6,252.95 in Riyadh, the highest close since Aug. 3. Ten stocks increased for every company that fell.

“After the long Eid break, good news flow coming from Europe over the week and oil in the high $90s, the Tadawul index is catching up with performance,” said Samer Darwiche, an analyst at Gulfmena Investments in Dubai. The Saudi bourse was closed Nov. 5 to Nov. 9 for the Muslim holiday of Eid-al-Adha.

U.S. and European stocks rose this past week as Italy’s approval of debt-reduction measures and the selection of a new Greek premier eased concerns Europe’s debt crisis will worsen. The S&P 500 gained 0.9 percent and the benchmark Stoxx Europe 600 Index increased 0.5 percent.

In Rome yesterday, the Senate voted 156 to 12 to pass a package of measures promised to the European Union to boost growth and cut Italy’s 1.9 trillion-euro ($2.6 trillion) debt, the world’s fourth-biggest. Prime Minister Silvio Berlusconi will resign once the plan is approved by parliament’s lower house, President Giorgio Napolitano said Nov. 8.

Greek Bailout

In Greece, a new unity government led by Lucas Papademos was sworn in yesterday with a mandate to implement budget reforms related to a 130 billion-euro bailout agreed on last month. Elections may take place on Feb. 19.

Banque Saudi increased 2.1 percent to 42.90 riyals, the highest close since Aug. 3. Jarir rallied 4.2 percent to 210 riyals, the highest since 2003 when Bloomberg started tracking the stock.

Sabic strengthened 0.5 percent to 96.50 riyals, the highest price since Oct. 31. Basic Chemical Industries climbed the most in two weeks, gaining 1.5 percent to 23.90 riyals after saying production will resume at a chlorine gas unit in the eastern Saudi region of Dammam.

Saudi Arabia, holder of 20 percent of the world’s proven oil reserves, depends on crude for 86 percent of its revenue. Oil prices rose 5 percent this week, the sixth weekly increase. Crude for December delivery yesterday climbed 1.2 percent to $98.99 a barrel on the New York Mercantile Exchange, the highest settlement since July 26.

“The market may further rise this week after it has become free of negative data from Europe,” said Turki Fadaak, head of research at Riyadh-based Albilad Investment Co.

Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.

--Editors: Amanda Jordan, Rob Verdonck

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


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