Saudi Arabian stocks advanced the most in a month led by one of the world’s largest petrochemicals companies as the price of oil, the nation’s biggest source of revenue, extended a rally.
The Tadawul All Share Index increased 1.9 percent to 7,602.68 at the close in Riyadh led by Saudi Basic Industries Corp.’s 3.8 percent gain. Brent crude, a benchmark for more than half the world’s oil, rose a fourth day to $52.73 a barrel at 1:54 p.m. in London.
“It’s a bit of rebound on the back of oil price recovery," said Saleem Khokhar, the head of equities at the asset management group of National Bank of Abu Dhabi PJSC, the biggest bank in the United Arab Emirates. “There are certainly opportunities at these levels for medium-to-longer term investors."
Oil prices climbed after U.S. industry data showed crude stockpiles fell in the world’s biggest consumer. It’s a welcome relief for stocks in Saudi Arabia, which relies on crude for about 90 percent of its revenue and where government spending is a driver for economic growth. The kingdom’s benchmark index of equities has lost almost a third of its value in the past 12 months as oil prices slumped more than 40 percent.
The Tadawul traded at 12.6 times 12-month estimated earnings on Wednesday, compared with 16.3 times in June, the highest value in at least five years, according to data compiled by Bloomberg.