Saudi Shares Gain Most in Almost Four Weeks on Stimulus Hopes

Saudi Arabian stocks advanced the most in almost four weeks on speculation governments and central banks will take steps to contain the euro-region debt crisis and stoke economic growth.

Bank stocks gained, led by Bank Albilad, which climbed the most in two weeks. Al Rajhi Bank, the kingdom’s biggest lender by market value, added 0.4 percent. Saudi Basic Industries Corp., the world’s largest petrochemicals maker by market value, rose 4.1 percent, the most since April 17.

The Tadawul All Share Index rose 1.5 percent to 6,767.81 in Riyadh, the biggest increase since July 3. The measure has advanced 5.5 percent this year.

The “possibility of further stimulus in the U.S. and recent announcements coming out of Europe are lifting sentiment,” Asim Bukhtiar, head of research at Riyad Capital, said by e-mail. “Volumes today look healthy considering the ongoing Ramadan month. Expect some tapering off in the next two weeks as we head into” Eid al-Fitr holidays.

European and U.S. equities gained yesterday on optimism Europe’s policy makers will take further action. The Standard & Poor’s 500 Index increased 1.7 percent this week, the most in four weeks.

ECB, Fed Meetings

European Central Bank President Mario Draghi is said to be planning talks in the coming days with Bundesbank President Jens Weidmann on stimulus measures including bond purchases. ECB and Federal Reserve policy makers are scheduled to gather next week in separate meetings.

German Chancellor Angela Merkel and French President Francois Hollande pledged to do everything to protect the single currency. The two largest euro-area economies are “bound by the deepest duty” to keep the 17-nation currency bloc intact, Merkel and Hollande said in a joint statement.

Bank Albilad rose 1.7 percent, the most since July 15, to 29.50 riyals. Al Rajhi added 0.4 percent to 72 riyals, after earlier gaining as much as 1.4 percent. Wala’a Insurance advanced 10 percent, also the most since July 15, to 30.80 riyals.

Oil for September delivery rose 0.8 percent to $90.13 a barrel by the close on the New York Mercantile Exchange yesterday, a fourth straight increase.

All 14 members of the Tadawul All Share Petrochemical Industries Index gained. Sabic jumped as much as 4.4 percent and closed up 4.1 percent at 89.75 riyals. Saudi International Petrochemical Co., known as Sipchem, added 3 percent to 18.65 riyals.

About 310 million shares were traded in Saudi Arabia today, compared with a 12-month daily average of 336 million. The Islamic holy month of Ramadan, when Muslims fast from sunrise to sunset and business activity slows, started earlier in July. The celebrations end with the Eid al-Fitr holiday.

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

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