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Saudi Arabian Shares Advance on Bets Drop Overdone; Oil Climbs

June 9 (Bloomberg) -- Shares rose in Saudi Arabia, OPEC’s biggest oil producer, as crude posted its first weekly gain since April and investors bet declines prompted by Europe’s debt crisis were overdone.

Kingdom Holding Co., the Saudi company controlled by Prince Alwaleed bin Talal, climbed 3.8 percent, the most in more than two months. Al Rajhi Bank, the kingdom’s largest lender by market value, rose 1.4 percent, while Saudi Basic Industries Corp., the world’s biggest petrochemical maker, known as Sabic, gained 0.3 percent.

The Tadawul All Share Index rose as much as 1.4 percent before gaining less than 0.1 percent at 6678.15 at the 3:30 p.m. close in Riyadh. The gauge lost 4.5 percent last week, its fifth weekly slide.

“Investors realize that the measure’s drop was exaggerated, so the market is correcting itself,” said Turki Fadaak, Riyadh-based head of research at Albilad Investment Co. “The measure was falling because of what’s happening in Europe, not because of anything fundamental in Saudi Arabia.”

Oil rose 1.1 percent last week to $84.10 a barrel in New York on June 8, the first five-day gain since the week ending April 27. Oil prices have fallen about 15 percent in 2012. Gulf Arab oil exporters, including Saudi Arabia and the United Arab Emirates, supply about a fifth of the world’s oil.

The European Central Bank’s pledge to add more stimulus if the euro-area economy worsens and Federal Reserve Vice Chairman Janet Yellen’s comments on considering another round of asset purchases are also bolstering the market, Fadaak said.

Kingdom Holding climbed to 10.9 riyals after its Kingdom Hotel Investments unit sold its stake in Movenpick Resort & Spa Karon Beach Phuket for $90 million to Crystal Caliber Sdn Bhd, a unit of Malaysia’s TA Global Bhd.

Saudi Arabia’s stock exchange is the only Persian Gulf bourse that trades on Saturdays.

To contact the reporter on this story: Dana El Baltaji in Dubai at delbaltaji@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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