Saudi Shares Climb to Five-Month High on Manufacturing Reports, U.S. Jobs

Saudi Arabian shares rose to the highest in more than five months, led by banks, as manufacturing reports bolstered global economic optimism before the release of earnings in the Arab world’s biggest economy.

The Tadawul All Share Index (SASEIDX) increased 0.7 percent to 6,452.38, the highest level since Aug. 1, by the 3:30 p.m. close in Riyadh. The Middle East’s largest bourse has gained 0.5 percent so far this year.

Al Rajhi Bank (RJHI), the kingdom’s largest lender by market value, rose the most since March 20. Halwani Brothers Co. (HB) gained the most since Dec. 25 after announcing plans to increase its meat processing capacity in Egypt. Yamamah Cement Co. (YACCO) closed at the highest level since July 2008 after releasing earnings results.

“Investors are adjusting positions ahead of earnings season,” Asim Bukhtiar, an equity analyst at Riyad Capital, said in a phone interview today. “Companies could get a boost as earnings season kicks off later this week.”

Saudi companies started announcing results last week. Jarir Marketing Co. (JARIR), the kingdom’s largest stationery retailer, said on Jan. 4 its estimated fourth-quarter profit gained 21 percent on higher sales. A day earlier, Yamamah Cement said its estimated fourth-quarter profit rose 19 percent.

Confidence

U.S. stocks rose this week after reports in the period showed that manufacturing in the U.S. and China improved last month. Separate releases showed that U.S. private employers added 325,000 workers to payrolls, while Labor Department figures yesterday showed the U.S. jobless rate dropped to the lowest level since February 2009.

“Positive jobs and manufacturing data can only bolster confidence,” Bukhtiar said.

Rajhi bank gained 4.7 percent to 72.75 riyals. Yamamah Cement rose 3.5 percent to 73.25 riyals. Halwani rose 5.8 percent to 59.25 riyals.

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

To contact the reporter on this story: Glen Carey in Dubai at gcarey8@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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