Saudi shares climb for third day on oil

22/05/2011 00:00 AST

Petrochemical and agriculture companies led Saudi Arabian shares Saturday to gain for a third day, rising to a one-week high, after oil prices advanced on a report fuel consumption increased in April. The Tadawul All Share Index gained 0.67 percent to 6,731.24 points, the measure's highest level since May 15. Seven shares rose for every stock that dropped.

"Small-cap stocks are lifting the market as investors lock-in intraday movements," said Asim Bukhtiar, an equity analyst at Riyad Capital. "Crude rose to $100 over the weekend on increased demand for fuel and a drop in inventory levels."

SABIC gained 0.7 percent to SR107.75. National Industrialization gained 3.6 percent to SR40.20, its highest price since Jan. 2008. Savola rose 0.7 percent to SR27.30. The Saudi Arabian food producer was given a "neutral" rating at HSBC.

"This may be a short-lived gain as near-term forecasts are generally bearish," said Bukhtiar. "Consumer spending in the US appears weak, which can temper optimism on recent tech listings."

"The Saudi market is in a consolidation phase with a lack of clarity from international markets," said Fuad Aghabi, investment director at Ajeej Capital in Riyadh.

Crude oil for June delivery gained 1.1 percent to settle at $99.49 a barrel on the New York Mercantile Exchange yesterday after the American Petroleum Institute reported that fuel consumption increased in April as economic growth bolstered demand for diesel by truckers. The Dow Jones Industrial Average fell 0.7 percent, the S&P 500 tumbled 0.8 percent and the Stoxx Europe 600 Index weakened 0.1 percent Friday.

Saudi Basic Industries Corp., the world's biggest petrochemicals maker, and Savola Azizia United Co. paced the gains. National Industrialization Co. rose to its highest price in more than three years.

Saudi Gazette