Bloomberg News

Sabic Rises to 7-Month High in Saudi Arabia on Oil: Riyadh Mover

February 22, 2012

Feb. 22 (Bloomberg) -- Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, rallied to the highest in almost seven months on bets rising oil prices will support the stock and as Saudi Arabia’s benchmark index surged to the highest since 2008.

The shares advanced 1.3 percent to 100.5 riyals, the highest since Aug. 3, at the 3:30 p.m. close in Riyadh. The stock was the most active by trading value in the Tadawul All Share Index, which climbed 0.9 percent to 7,031.26, the highest since September 2008. The stock has advanced 4.4 percent so far this year compared with a 9.6 percent gain in the benchmark.

“Sabic is trading above 100 riyals on the strength in Brent prices,” said Dubai-based Ibrahim Masood, who helps manage about $400 million at Mashreqbank PSC. “The stock has seen significantly higher volumes over the past couple of days as offshore investors tried to play catchup with the Saudi market.”

Sabic in January posted a 35 percent rise in full-year profit. Chief Executive Officer Mohamed al-Mady said that month he expects prices and demand for petrochemicals to improve toward the end of 2012. Brent crude futures have gained 14 percent this year as the European Union and U.S. imposed sanctions on Iran, prompting the Middle East’s second-biggest producer to halt oil exports to France and the U.K.

Speculation that oil supplies will be disrupted has increased as tension between Iran and Western nations escalates, David Greely, head of energy research at Goldman Sachs Group Inc. in New York, said in a report today. The bank maintained a recommendation that investors buy Brent contracts for July 2012 to take advantage of rising prices.

Sabic lost 8.1 percent in 2011, compared with a 3.1 percent drop in the Saudi Tadawul Index. Fourteen analysts recommend investors buy Sabic shares, while three have a hold rating on the stock, according to data compiled by Bloomberg.

--Editors: Shaji Mathew, Shanthy Nambiar

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus