Saudi Shares Rise to 3-Month High on Possible Stimulus

Shares in Saudi Arabia rose to the highest level in more than three months on climbing oil prices and possible U.S. monetary stimulus as the stock market reopened following the week-long Eid holiday.

Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemical maker known as Sabic, advanced to the highest level since June 30. Al-Rajhi Bank (RJHI), the kingdom’s biggest by market value, rose the most since Aug 4. Dar Al Arkan Real Estate Development Co. (ALARKAN) increased to the highest since July 8.

The Tadawul All Share Index gained 1.4 percent to 7,104.48, the highest since May 13, at the close in Riyadh. The Arab world’s biggest stock market has increased 11 percent this year.

“Following the one-week break, the Saudi market will do some catching up with international markets and events,” Asim Bukhtiar, head of research at Riyad Capital, said in response to e-mailed questions. “Hints of stimulus and resilient crude prices are encouraging local investors to snap-up equities.”

In the U.S., many Federal Reserve policy makers backed monetary easing and Chairman Ben S. Bernanke cited the ability to stimulate growth, according to minutes of the central bank’s last meeting on July 31-Aug. 1. Attention now turns to Bernanke’s Aug. 31 speech in Jackson Hole, Wyoming, where he may clarify his thinking on the need for stimulus.

Oil rose for a fourth week as Tropical Storm Isaac strengthened in the Caribbean Sea on a path that may threaten crude production in the Gulf of Mexico. Crude for October delivery slid 12 cents to settle at $96.15 a barrel on the New York Mercantile Exchange yesterday. Prices rose 14 cents this week. Oil has rallied 24 percent since this year’s closing low of $77.69 reached on June 28.

Sabic gained 1.4 percent to 92.50 riyals, Al-Rajhi increased 0.7 percent to 74 riyals and Dar Al Arkan advanced 7 percent to 9.95 riyals.

Saudi Arabia (SASEIDX)’s stock exchange is the only Persian Gulf bourse operating on Saturdays. The Saudi market was closed last week for the Muslim Eid holiday after the end of Ramadan.

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

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

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