Saudi Stocks Advance After ‘Day of Rage’ Fails to Occur, Led by Al Rajhi

Saudi stocks rose for a sixth day as investors looked for bargains after the world’s biggest oil producer survived a so-called Day of Rage.

Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemical maker, climbed 1 percent, and Al Rajhi Bank (RJHI), the kingdom’s biggest lender, jumped 3.3 percent. The Tadawul All Share Index (SASEIDX) climbed 3 percent, the steepest gain since March 7, to 6,297.

“Investors are realizing that the March 11th Day of Rage was overly exaggerated and turned out to be a Day of Unity,” said John Sfakianakis, chief economist at Banque Saudi Fransi, in Riyadh. “Common sense is quickly replacing panic as macro fundamentals are solid and very healthy.”

Police and anti-riot vehicles patrolled most Saudi cities yesterday, thwarting activists’ plans to rally for political and economic changes. More than two months of protests have rocked the Middle East and North Africa as citizens demand civil rights, better living standards and the ouster of entrenched autocratic regimes.

Oil declined 1.5 percent yesterday to the lowest settlement since March 1. Crude for April delivery tumbled to $101.16 a barrel on the New York Mercantile Exchange. Saudi Arabia holds about 20 percent of the world’s proven oil reserves.

“Saudi Arabia is proving to be more robust against political turmoil than many other Arab nations,” said Amro Halwani, a senior trader at Shuaa Capital PSC (SHUAA) in Riyadh. “Investors are increasingly willing to put their money back into the market to take advantage of low-priced stocks.”

Relative Strength

Saudi Basic, also known as Sabic, advanced to 102.5 riyals. The relative strength index for the stock closed last week at 14. A reading below 30 indicates a stock will rise, according to some technical analysts.

“The valuations looked very attractive and investors have returned as the government funds provided important support early last week,” said Sfakianakis. On March 9, Saudi billionaire Prince Alwaleed bin Talal said he embarked on a plan to invest more than 500 million riyals ($133 million) in Saudi stocks after political unrest in the Middle East pushed down equity prices.

Al Rajhi, the kingdom’s biggest publicly traded lender by market value, rose to 78 riyals, the highest level since Feb. 16. Etihad Etisalat Co. (EEC), the second-biggest phone company by market value, climbed 4.64 percent, to 50.75 riyals.

Saudi Industrial Investment Group (SIIG) rose 9.8 percent, the maximum fluctuation allowed in a trading session, to 20.8 riyals after the company said estimated profit jumped in February to 106 million riyals from 27 million riyals a year earlier.

Saudi Telecom Co. (STC), the largest phone operator by market value, rose 1.4 percent to 37.3 riyals after it raised its stake in Indonesia’s NTS, known as Axis, to 80.1 percent from 51 percent. STC will also offer an $81 million loan and is committed to offering another $290 million when necessary.

“Risk appetite has widened and fundamentals are expected to be back in play,” said Shuaa’s Halwani.

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

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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