Saudi Stocks Rally on Earnings After Oil Climbs; Petrochemicals Lead Gains

Saudi shares rose the most in a week as first-quarter earnings improved and crude oil’s rally to a 30-month high increased confidence in the petrochemicals industry.

National Industrialization Co. (NIC), the petrochemicals company known as Tasnee, advanced 1.2 percent and Al Rajhi Bank (RJHI), the kingdom’s largest publicly traded lender, added 0.7 percent. The 146-member Tadawul All Share Index (SASEIDX) rose 0.5 percent, the biggest gain since April 2, to 6,608.6 by the close in Riyadh.

“Traders are focusing on the positives by continuing to build positions at the start of first-quarter results,” said Fuad Aghabi, investment director at Ajeej Capital in Riyadh. “This is further supported by gains in the international equity and oil markets.”

Crude rose above $112 in New York for the first time in 30 months and Brent topped $126 in London on concern Libyan production may not rebound when fighting ends. Crude oil for May delivery rose 2.5 percent to $112.79 a barrel on the New York Mercantile Exchange yesterday, the highest close since Sept. 22, 2008.

Oil futures are up 4.5 percent this week and 32 percent higher than a year ago. Saudi Arabia holds one-fifth of the world’s proven oil reserves.

Al Rajhi advanced to 77.25, the highest level since April 4, while Tasnee climbed to 34.3 riyals. Saudi Industrial Investment Group (SIIG) increased 1.9 percent, the biggest gain in a week, to 24.3 riyals.

‘More Surprising Numbers’

“Those who are under-exposed to petrochemicals will not want to miss the train, as the market expects more surprising numbers,” said Amro Halwani, a senior trader at Shuaa Capital PSC (SHUAA) in Riyadh.

Kingdom Holding Co. (KINGDOM) climbed the most in almost three weeks after the Saudi Arabian investment company and Bahrain Telecommunications Co. signed an agreement with Mobile Telecommunications Co. to buy the Kuwaiti company’s 25 percent stake in Zain Saudi Arabia. The shares rose 1.7 percent, the biggest gain since March 20, to 9.25 riyals.

Yamamah Saudi Cement Co. (YACCO), Saudi Arabia’s third-largest cement maker by market value, gained the most in two weeks, rising 1.9 percent to 54.75 riyals after it reported a 9 percent increase in first-quarter profit to 180 million riyals.

“Yamamah Cement’s performance was pretty decent and has also set a gauge for the sector as a whole,” 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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