Saudi Shares Rally to One-Month High After Bank Earnings, Rising Oil Price

Saudi shares rose to the highest level in a month as banks posted better-than-estimated earnings and after global stocks gained and oil rallied amid optimism over steps by European leaders to support the region’s banks.

Al Rajhi Bank (RJHI), Saudi Arabia’s largest publicly traded lender by market value, strengthened the most in a week. Saudi Holland Bank jumped the most in seven months after posting four- fold profit increase. Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemicals maker, surged to the highest price in three weeks.

The 148-company Tadawul All Share Index (SASEIDX) rose 1 percent to 6,164.60, the highest level since Sept. 17, at the 3:30 p.m. close in Riyadh. Six shares rose for every stock that dropped.

“The market is gaining, supported by banks, many of whose earnings were released last weekend,” said Turki Fadaak, head of research at Riyadh-based Albilad Investment Co. Eight of the 11 publicly traded banks reported third-quarter earnings on Oct. 12.

“Continuous positive international market performance and oil above 85 dollars, as well as good results by major Saudi banks are lifting the index,” said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai.

U.S. stocks rose, driving the Standard & Poor’s 500 Index to the largest weekly gain since July 2009. The S&P 500 climbed 6 percent this week to the highest level since Aug. 3. Stocks rallied after German Chancellor Angela Merkel and French President Nicolas Sarkozy said they will deliver a plan to recapitalize European banks by Nov. 3. The Group of 20 began talks yesterday to address the debt crisis.

Rising Oil Price

Oil rose to a three-week high in New York yesterday. Crude oil for November delivery rose $2.57 to $86.80 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 20. Prices climbed 4.6 percent this week. Saudi Arabia, holder of one-fifth of the world’s proven oil reserves, depends on oil for 86 percent of its revenue.

Sabic climbed 1.6 percent to 92.75 riyals, its highest price since Sept. 27.

Al Rajhi posted the largest gain since Oct. 9, soaring to 69 riyals after trading up as much as 2.2 percent. The lender said third-quarter profit rose 18 percent 1.94 billion riyals ($517 million), beating analyst estimates.

Saudi Hollandi jumped 5 percent, the largest gain since March 7, to 27.20 riyals. The Riyadh-based lender said third- quarter net income rose to 299.4 million riyals, about four times the profit of the year-earlier period of 85.3 million riyals.

Banque Saudi Fransi (BSFR) surged the most in six weeks, gaining 3.6 percent to 40 riyals after the Saudi lender part-owned by Credit Agricole SA said third-quarter profit rose 22 percent to 760 million riyals.

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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