July 2 (Bloomberg) -- Saudi shares rose for a third day, led by petrochemical companies and banks, after U.S. stocks posted the biggest weekly rally in two years after Greece took action to avoid a default.
Saudi Basic Industries Corp., the world’s largest petrochemical maker, and Al Rajhi Bank paced the gains. Saudi Arabian Mining Co., also known as Ma’aden, rose for the fifth day after announcing financing for an aluminum project the company is developing in a joint venture with Alcoa Inc.
The 146-company Tadawul All Share Index rose 1.2 percent to 6,653.68 at the close in Riyadh today, its highest closing level since June 6. The largest bourse by market value in the Middle East has gained 0.5 percent this year.
“There is market optimism after Greece avoided a default on its debt,” Mohammad Ali Shah, a senior financial analyst at Global Investment House, said in an interview from Riyadh. “Following the global markets, Saudi Arabia has seen an upside as well.”
U.S. and European stocks rose this week after Greek Prime Minister George Papandreou on June 29 clinched enough votes to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off default for his debt-laden nation. Lawmakers backed a bill on June 30 to authorize the measure.
The S&P 500 surged 5.6 percent to 1,339.67. The Dow Jones Industrial Average advanced 5.4 percent to 12,582.77 this week. Both indexes rose all five days for the biggest weekly gains since July 2009.
Saudi shares are also being helped by “the expectations for positive second-quarter results,” Shah said. Saudi companies will start to release quarterly earnings results later this month.
Sabic, Ma’aden Gain
Sabic advanced 1.9 percent to 106 riyals, the highest level since June 1. Fitch Ratings affirmed on June 30 Sabic’s long-term issuer default rating at A+, citing the company’s “strong business profile and moderate leverage.” Al-Rajhi Bank, the kingdom’s largest lender by market value, gained 1.4 percent to 74 riyals, the highest since June 13.
Ma’aden shares gained 1.8 percent to 27.7 riyals, the highest value since May 30. The company said today it received commitments for $1 billion in commercial loans to finance the second phase of an aluminum project being developed in a joint venture with Alcoa Inc.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
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