Saudi Shares Climb After Petrochemicals Exceed Profit Estimates

April 23, 2011, 8:46 AM EDT

By Mourad Haroutunian

April 23 (Bloomberg) -- Saudi Arabian shares rose to the highest in a week after petrochemical companies reported better- than-estimated earnings and oil jumped.

Saudi Basic Industries Corp., the world?s largest petrochemicals maker, rose to the highest since September 2008, while National Industrialization Co. climbed to a three-year high. Rabigh Refining and Petrochemicals Co. surged by the maximum allowed in a single trading session.

The 146-company Tadawul All Share Index advanced 0.2 percent to 6,590.64 at the 3:30 p.m. close in Riyadh, the gauge?s highest level since April 16. Crude oil for June delivery rose for a third day to $112.29 a barrel on April 21 before the Easter vacation halted trading, taking its gain this year to 23 percent. Sabic said this week that first-quarter profit surged 42 percent, while Rabigh?s net income more than doubled.

?The market is poised for further upside with excellent first-quarter results out of the petrochemicals and some of the midcaps, coupled with positive signs of sustained global economic recovery,? said Fuad Aghabi, investment director at Ajeej Capital in Riyadh.

Sabic advanced 0.7 percent to 112.50 riyals ($30) before a shareholder meeting later today that may approve a 2-riyals-per- share dividend for the second half of 2010. Saudi Arabia holds one-fifth of the world?s proven oil reserves.

?Oil?s stellar performance over the Saudi weekend is keeping petrochemicals well bid despite some limited stock- specific profit-taking,? said Amro Halwani, a senior trader at Shuaa Capital PSC in Riyadh. ?Investors are particularly optimistic on Sabic and expect its shareholders meeting to confirm a healthy dividend.?

Rabigh gained 9.7 percent to 26.6 riyals, the highest since July 20. National Industrialization climbed 3.8 percent to 38.3 riyals, the highest since April 2008.

Saudi Arabia?s stock exchange is the only Gulf Arab bourse open on Saturdays.

--Editors: Paul Armstrong

To contact the reporter on this story: Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net.

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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