Saudi Stocks Advance on U.S. Stimulus Package, Higher Oil Prices
Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemical maker known as Sabic, rose to the highest level since May 23. National Industrialization Co. (NIC), an industrial and manufacturing firm, climbed the most since in July 31. Etihad Etisalat Co., a Saudi telecommunications operator, gained the most in a week.
The Tadawul All Share Index gained 0.9 percent to 7,165.86, the highest level since May 13, in Riyadh at 3:30 p.m. The Arab world’s biggest stock market has increased 12 percent this year.
The U.S. “stimulus will be a factor domestically as the S&P 500 reached near five-year highs,” Asim Bukhtiar, head of research at Riyad Capital, said in response to e-mailed questions. “We expect positive opening this morning on the heels of strong gains in developed markets over the past two days. Petrochemicals should benefit from $99 crude.”
Equities rallied as the Fed said on Sept. 13 that it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment. The Standard & Poor’s 500 Index added 1.9 percent this week to 1,465.77, extending its two-week rally to 4.2 percent. The index is 6.8 percent away from its all-time high set in October 2007.
Oil climbed to the highest level in more than four months as the Fed’s plan boosted demand for commodities and stocks. Crude oil for October delivery advanced yesterday by 69 cents, or 0.7 percent, to $99 a barrel on the New York Mercantile Exchange, the highest settlement since May 3. Futures touched $100.42 in intraday trading. Prices increased 2.7 percent this week and are up 11 percent from a year ago.
Saudi Arabia’s stock exchange is the only Persian Gulf bourse operating on Saturdays.
To contact the reporter on this story: Glen Carey in Riyadh at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew J. Barden at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.