12/10/2015 05:16 AST
Saudi Arabia's main share market index rose on Sunday as investors continued to buy beaten-down petrochemical shares on hopes that oil prices may have bottomed out, while most other regional bourses were sluggish.
Brent oil's strong recovery above $50 a barrel last week made investors more comfortable with petrochemical stocks. Sector leader Saudi Basic Industries Corp. (SABIC) climbed 3.2 percent to SR89.25 on Sunday, while four other stocks in sector were also among the 10 most-traded stocks and saw their prices surge.
Although the outlook for oil and therefore petrochemical prices remains unclear, equity valuations are now seen low enough to interest investors. Analysts' median target price for SABIC is SR106, according to Thomson Reuters data.
The Saudi Tadawul All-Share Index rose 1.9 percent to 7,827 points in active trade, testing technical resistance at 7,812-7,953 points, its highs in September and at the end of August.
Among other big Saudi gainers, oil shipper Bahri surged 8.9 percent after its net profit for the three months to Sept. 30 came in at SR510.3 million, up from SR84.85 million in the same period a year earlier. Albilad Capital had forecast SR300 million.
Miner Maaden added 3.6 percent in unusually heavy trade after saying it had started trial production at the Ad Duwayhi gold mine; the average annual production capacity of Ad Duwayhi was estimated at 180,000 ounces of gold. Commercial production is to start in the first quarter of 2016.
But Almarai, the Gulf's largest dairy company, slipped 0.6 percent after reporting a 10.3 percent rise in its third-quarter net profit to SR595.1 million; analysts had forecast SR602.9 million.
Other Gulf stock markets were more sluggish. Prices in most of those markets had dropped less than Saudi Arabia earlier this year, and they remain preocuppied by risks such as a worsening of banking sector liquidity and asset quality due to low oil prices, which have reduced flows of state money into banks.
Dubai's market index edged up 0.2 percent to 3,713 points in thin trade. The most heavily traded stock, GFH Financial, added 2.8 percent.
At the end of last week Fitch Ratings affirmed the company's long-term rating at B-minus with a stable outlook; in a statement to the bourse on Sunday, GFH said this was an endorsement of the company's strategy in handling its debt and that higher ratings were expected in future.
Abu Dhabi's index added 0.4 percent to 4,565 points on buying of blue chips such as Aldar Properties, up 0.4 percent, and First Gulf Bank, up 0.7 percent.
Qatar climbed 0.9 percent to 11,856 points as Vodafone Qatar, the most heavily traded stock, surged 6.2 percent in its largest volume since February.
Drilling rig provider Gulf International Services was another big gainer, jumping 4.6 percent on the back of firm oil prices.
Arab News
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