Oil Price Rise
02/04/2011 00:00 AST
Saudi stocks advanced to the highest level in almost six weeks as investors start the month with expectations companies will post encouraging quarterly earnings and oil climbed to its highest price since 2008.
Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemical maker, added 1 percent, and Etihad Etisalat Co. (EEC), the kingdom’s second-largest phone company, advanced 1.5 percent. The 146-member Tadawul All Share Index (SASEIDX) rose 0.9 percent, the highest intraday level since Feb. 15, to 6,622.43 at 12:49 p.m. in Riyadh.
“The market is rallying due to anticipation of good quarterly results especially by the index heavyweights such as petrochemicals,” John Sfakianakis, chief economist at Riyadh- based Banque Saudi Fransi, said in an e-mailed response to questions.
Saudi Basic, also known as Sabic, advanced to 106.75 riyals, the highest since Jan. 26. The Riyadh-based company’s exports to Japan have not been affected by the earthquake that devastated northern Japan on March 11, Al Hayat reported, citing Chief Executive Officer Mohamed Al-Mady.
“Investors have absorbed regional political news and the focus has shifted to first-quarter earnings season,” said Asim Bukhtiar, an equity analyst at Riyad Capital in Riyadh. Syria is the latest Middle Eastern country to be hit by a wave of uprisings that ousted longtime rulers in Egypt and Tunisia, sparked an armed conflict in Libya and inspired protests in Yemen and Bahrain.
Oil Boost
“The robust oil prices noticed last week are also giving a good boost of confidence for the economy in general and the healthy fiscal situation in particular in light of the recently announced measures by King Abdullah,” said Sfakianakis.
Crude oil climbed to a 30-month high in New York as the U.S. added more jobs than forecast, signaling increased demand, and as fighting intensified in Libya. Oil for May delivery rose 1.1 percent to $107.94 a barrel on the New York Mercantile Exchange, the highest settlement since September 2008.
Saudi King Abdullah announced a $36 billion spending plan on Feb. 23 and ordered another $93 billion spending package on March 18, presumably to help prevent unrest from gathering pace in the kingdom.
“Strong quarterly performance on the North American markets is also fueling investor sentiment in emerging markets,” said Bukhtiar.
The Dow Jones Industrial Average gained 6.4 percent and the Standard & Poor’s 500 Index added 5.4 percent in the first quarter.
Etihad Etisalat, also known as Mobily, rose to 52.75 riyals, the highest level since Feb.16.
Saudi Telecom Co. (STC), the kingdom’s largest phone operator by market value, advanced 1.3 percent to 39 riyals after it submitted a technical offer to the Syrian government for the country’s third mobile license.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
Bloomberg
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