Saudi Arabian shares rose for the third day in four, reversing earlier losses, even as signs of slowing growth stoked concern global fuel demand will weaken.
Alinma Bank (ALINMA), an Islamic lender based in Saudi Arabia, and Saudi Kayan Petrochemical Co. (KAYAN), a unit of Saudi Basic Industries Corp. (SABIC), led the gains, climbing 1.6 percent and 1.5 percent respectively. The 148-company Tadawul All Share Index (SASEIDX) strengthened less than 0.1 percent to 6,116.71 at the 3:30 p.m. close in Riyadh, erasing a drop of as much as 0.6 percent. Three shares gained for every two that fell.
“Small and mid-cap names with limited international exposure led the reversal,” said Asim Bukhtiar, an equity analyst at Riyad Capital said by e-mail. “Investors flooded into stocks that should not have immediate fallout from global economic woes and should not report negative surprises when third-quarter results are announced.”
Alinma rallied the most since since Sept. 13, while Kayan had its strongest gain in a month, offseting an earlier drop in the gauge as investors bet a decline in China’s purchasing managers’ index, falling German retail sales and slowing U.S. consumer will push crude lower. Saudi Arabia, holder of 20 percent of the world’s proven reserves, depends on oil for 86 percent of its revenue. Crude slid $2.94 to $79.20 a barrel in New York yesterday.
“Large-cap names with a wider footprint and customer base outside of Saudi Arabia remained under pressure,” said Bukhtiar. Sabic, the world’s biggest petrochemicals maker, lost 0.8 percent, the most since Sept. 12, to 91.75 riyals, after its unit Sabic Innovative Plastics had its ratings withdrawn by Moody’s Investors Service. Sabic has a 12 percent weighting in the index.
Kayan closed at 17.25 riyals after the company said it began commercial operations at most of its main plants in Jubail Industrial City as of today. National Industrialization Co. (NIC), known as Tasnee, rallied 0.5 percent to 39.60 riyals.
Zain Saudi Arabia, the kingdom’s third-largest mobile-phone company by market value, retreated the most in three weeks, falling 2.4 percent, to 6.10 riyals after Kingdom Holding Co. (KINGDOM) and Bahrain Telecom Co. (BATELCO) abandoned their offer to purchase a stake.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
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