Shares rose in Saudi Arabia, OPEC’s biggest oil producer, as crude posted its first weekly jump since April and investors bet declines prompted by Europe’s debt crisis were overdone.
Al Rajhi Bank (RJHI:AB), the kingdom’s largest lender by market value, rose 1.4 percent, while Saudi Basic Industries Corp. (SABIC:AB), the world’s biggest petrochemical maker, known as Sabic, gained 0.8 percent.
The Tadawul All Share Index (SASEIDX) rose as much as 1.4 percent before trading up 0.3 percent at 6,683.76 as of 2:06 p.m. in Riyadh. The gauge lost 4.5 percent last week, its fifth weekly slide.
“Investors realize that the measure’s drop was exaggerated, so the market is correcting itself,” said Riyadh- based Turki Fadaak, head of research at Albilad Investment Co. “The measure was falling because of what’s happening in Europe, not because of anything fundamental in Saudi Arabia.”
Oil rose 1.1 percent last week to $84.10 a barrel in New York on June 8, the first five-day gain since the week ending April 27. Oil prices have fallen about 15 percent in 2012. Gulf Arab oil exporters, including the Saudi Arabia and the United Arab Emirates, supply about a fifth of the world’s oil.
The European Central Bank’s pledge to add more stimulus if the economy worsens and Federal Reserve Vice Chairman Janet Yellen’s comments on considering another round of asset purchases are also bolstering the market, Fadaak said.
Al Rajhi shares rose to 72 riyals ($19.20), while Sabic’s shares gained to 90.75 riyals ($24.20). Saudi Arabia’s stock exchange is the only Arab Gulf bourse operating on Saturdays.
