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Saudi Shares Climb to 3 1/2-High on Earnings Prospects

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March 31 (Bloomberg) -- Saudi Arabian shares rose to the highest level in more than 3 1/2 years as a positive outlook for earnings and oil prices lifted banks and petrochemical companies.

The Tadawul All Share Index climbed 0.7 percent to 7,835.15 at 3:30 p.m. in Riyadh, and earlier today touched 7,852.85, the highest level since Sept. 13, 2008. The 152-member index has gained 22 percent this year.

Samba Financial Group rose to the highest level in almost a year. Saudi Basic Industries Corp., the world’s largest petrochemical company known as Sabic, advanced 0.5 percent, while Yanbu National Petrochemical Co., a Sabic unit, jumped 2 percent.

“In terms of fundamentals, the market looks pretty reasonable,” Jarmo Kotilaine, chief economist at Jeddah-based National Commercial Bank, said in a phone interview. “The earnings outlook is good. Oil prices are high. There are a number of factors that have made equities the flavor of the month.”

Crude oil for May delivery settled at $103.02 a barrel on the New York Mercantile Exchange yesterday. Oil prices increased 4.2 percent for the quarter after a gain of 25 percent in the last quarter of 2011.

Saudi companies will report first-quarter financial results in April. The banks’ cumulative profits jumped 36 percent in the first two months of this year to 6.74 billion riyals ($1.8 billion), data on the central bank’s website showed.

Samba Financial Group increased 1.3 percent to 56.75 riyals, the highest price since April 11. Banque Saudi Fransi rose 0.8 percent to 49.60 riyals. Sabic shares advanced 0.5 percent to 108 riyals, while Yanbu National gained 2 percent to 52 riyals.

Saudi Arabia’s stock exchange is the only Gulf Arab bourse that opens 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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