Saudi Arabian Shares Rise Led by Sabic and Saudi Telecom Co.

Saudi Arabia’s benchmark stock index rose to the highest in a month, led by petrochemicals, banks and telecommunication companies, on optimism about fourth-quarter earnings.

Saudi Basic Industries Corp. (SABIC), known as Sabic, advanced to the highest since Nov. 7, while Saudi Telecom Co. (STC) increased the most in two months. Al-Rajhi Bank (RJHI), the kingdom’s biggest bank by market value, climbed the most since Dec. 1.

The Tadawul All Share Index (SASEIDX) gained 0.6 percent to 6810.98, the highest since Nov. 14, at the close in Riyadh.

“Investors are optimistic about fourth-quarter earnings coming out soon as well as the issuance of the Saudi government budget for this year,” Turki Fadaak, head of research and consultancy at Albilad Investment Company, said in an e-mail.

The kingdom’s break-even oil price to balance next year’s budget, to be announced later this month, is estimated at $65 a barrel, up from $62.20 this year, National Commercial Bank said in an e-mailed report on Nov. 27. The biggest producer in the Organization of Petroleum Exporting Countries may record revenue of $355 billion from oil exports this year, up from $317 billion in 2011, according to NCB, the largest Saudi lender by assets.

Sabic, the world’s largest petrochemical maker, rose 0.6 percent to 91.25 riyals, and STC climbed 2.2 percent to 42.4 riyals. Al-Rajhi bank increased 0.8 percent to 65 riyals.

Oil capped its fifth weekly gain since Nov. 2 as manufacturing grew in the U.S. and China, the world’s two biggest crude-consuming countries.

Oil also rose as the euro strengthened against the dollar after European Union chiefs pledged to seek a joint strategy for handling failing banks. The euro gained as much as 0.7 percent to $1.3173, the highest level since May. A stronger euro and weaker dollar raise dollar-denominated oil’s appeal as an investment alternative.

Saudi Arabia’s stock exchange is the only Persian Gulf bourse operating Saturdays.

To contact the reporter on this story: Deema Almashabi in Riyadh at dalmashabi@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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