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Saudi Shares Climb to Four-Month High; Sabic, Savola Azizia Rise

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May 21 (Bloomberg) -- Petrochemical and agriculture companies led Saudi Arabian shares to a four-month high, after oil prices advanced on a report U.S. fuel consumption increased in April.

Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, and Savola Azizia United Co. paced the gains. National Industrialization Co. rose to its highest price in more than three years.

The 146-member Tadawul All Share Index jumped 0.7 percent to 6,731.24, the measure’s highest level since Jan. 17, at the 3:30 p.m. close in Riyadh. Four shares rose for every stock that dropped and the index gained for a third day.

“Small-cap stocks are lifting the market as investors lock-in intraday movements,” said Asim Bukhtiar, an equity analyst at Riyad Capital. “Crude rose to $100 over the weekend on increased demand for fuel and a drop in inventory levels.”

Crude oil for June delivery gained 1.1 percent to settle at $99.49 a barrel on the New York Mercantile Exchange yesterday after the American Petroleum Institute reported that fuel consumption increased in April as economic growth bolstered demand for diesel by truckers. Brent crude futures in London rose to $112.39 a barrel. Saudi Arabia holds one-fifth of the world’s proven oil reserves.

Sabic gained 0.7 percent to 107.75 riyals, the highest price in a week. National Industrialization gained 4.9 percent to 40.70 riyals, its highest closing price since Jan. 15, 2008. Savola rose 1.5 percent to 27.50 riyals. The Saudi Arabian food producer was given a “neutral” rating at HSBC Holdings Plc.

MedGulf Rated A-

Mediterranean & Gulf Insurance & Reinsurance Co. gained 1.7 percent, the largest gain in ten days, to 29.90 riyals after the insurance company known as MedGulf was rated A- by Standard & Poor’s Ratings Services.

“This may be a short-lived gain as near-term forecasts are generally bearish,” said Bukhtiar. “Consumer spending in the U.S. appears weak, which can temper optimism on recent tech listings.” The Dow Jones Industrial Average fell 0.7 percent, the S&P 500 tumbled 0.8 percent and the Stoxx Europe 600 Index weakened 0.1 percent yesterday.

“The Saudi market is in a consolidation phase with a lack of clarity from international markets,” said Fuad Aghabi, investment director at Ajeej Capital in Riyadh.

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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