Saudi Shares Advance on US Gains; Sabic Rises

15/03/2009 00:00 AST

Saudi Arabian shares gained, led by Saudi Basic Industries Corp., the world’s largest chemicals maker by market value, after US stocks had their biggest weekly advance since November.

Saudi Basic Industries, also known as Sabic, advanced after announcing dividend plans for 2008.

Saudi Paper Manufacturing Co., a maker of tissue paper, climbed the most since November 29 after announcing an increase in production from a plant in Dammam. Al-Rajhi Bank, the largest lender in the kingdom by market value, also gained the most since November 29.

The Tadawul All Share Index rose 3.4 per cent to 4,269.91 in Riyadh. The index has declined 11 per cent this year after losing more than half its value in 2008 as oil prices have dropped.

“The Saudi market is trading in step with what happens in the US,” said Ali Khan, head of cash-equity trading at Dubai- based Arqaam Capital Ltd.

“International market performance is taking precedence over the direction in oil.” US stocks rose to finish the biggest weekly gain for the Standard & Poor’s 500 Index since November as takeover speculation lifted healthcare companies and financial shares capped their steepest advance on record. The S&P 500 advanced almost 11 per cent over the past five days, its biggest weekly increase since a 12 per cent rally in the period ended November 28.

Sabic gained 5.2 per cent to 36.5 riyals. The chemical maker plans to pay a cash dividend of 3 riyals a share for 2008, the company said in a statement on the Saudi bourse Web site on Saturday.

Saudi Paper Manufacturing Co. jumped 9.7 per cent to 51 riyals. The paper maker invested 300 million riyals ($80 million) to expand production by 80 per cent, according to a company statement on the Saudi bourse Web site.

Al-Rajhi Bank advanced 6.6 per cent to 45 riyals, valuing the company at 67.5 billion riyals.

The shares have declined 20 per cent this year.

Bloomberg