Saudi Arabia Shares Gain on Bets Record Budget to Boost Economy

Saudi Arabian shares rose the most in a week on expectations the government’s record budget expenditure for 2013 will support economic growth.

Samba Financial Group, the kingdom’s the second-largest publicly traded lender, rose the most since Dec. 19. Kingdom Holding Co., an investment company controlled by Saudi Prince Alwaleed bin Talal, closed at the highest level since March 2008. The benchmark Tadawul All Share Index gained 0.2 percent, the most since Dec. 22, to 6,877.06 at the close in Riyadh.

Saudi Arabia raised its expenditure target for next year by 19 percent to 820 billion riyals ($219 billion), the Finance Ministry said in a statement. The kingdom is embarking on an investment program valued at more than $500 billion to build infrastructure, industry and create jobs. The Saudi index has gained 7.2 percent this year after falling 3.1 percent in 2011.

“Although external factors might seem negative due to the U.S. fiscal cliff, Saudis are enthusiastic about the Saudi fiscal budget for this year which is affecting the market in a positive manner,” said Mohammed Al-Omran, financial analyst and president of the Gulf Center for Financial Consultancy in Riyadh.

The Standard & Poor’s 500 Index dropped 1.9 percent last week, the biggest such decline in almost two months, as investors await the outcome of weekend budget talks by U.S. lawmakers to avert the so-called fiscal cliff, referring to more than $600 billion in tax increases and spending cuts set to take effect in January.

Samba Financial Group, the biggest mover in terms of percentage points on the Saudi gauge, increased 1.1 percent to 45.5 riyals. Kingdom Holding advanced 6.3 percent to 20.2 riyals.

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