Saudi Arabian shares gained the most in a week after U.S. Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate U.S. growth.
Saudi Basic Industries Corp., the world’s largest petrochemicals maker, climbed the most since April. 21. Almarai Co., the kingdom’s biggest food producer, jumped 4.3 percent after saying a new infant formula plant will start production in May. Samba Financial Group advanced the most in more than a month. The Tadawul All Share Index rose 0.9 percent, the most since April 21, to 7,607.59 in Riyadh at the 3:30 p.m. close. The 152-member index has increased 19 percent this year.
The forecasts by the U.S. Federal Reserve “for growth and unemployment may have a positive impact on the Saudi market, particularly the petrochemical sector,” Turki Fadaak, head of research at Riyadh-based Albilad Investment Co., said.
The Fed on April 25 upgraded its estimates for growth and unemployment this year while repeating its view that borrowing costs are likely to remain “exceptionally low” at least through late 2014. Oil for June delivery climbed 0.4 percent to $104.93 a barrel yesterday in New York, the highest settlement since April 2. Futures advanced 1.8 percent this week.
“Market activity reflects the gathering anticipation for further stimulus by the Fed in the U.S.,” Asim Bukhtiar, head of research at Riyad Capital, said in response to e-mailed questions. The domestic market has shown correlation with U.S. markets in the past. Stimulus and positive signs of economic direction in the US will drive sentiment here as well.’’
Saudi Basic advanced 0.7 percent to 103.5 riyals. Almarai rose to 67 riyals. Samba, the country’s second-largest bank by market value, gained 3 percent, the mosts since March 25, to 52 riyals.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse operating on Saturdays.