Business | Markets
Saudi shares bounce back amid global market rally
Saudi shares surged 9.5 per cent on Saturday, led by blue chips, as investors took heart from a global stock rally and reassuring remarks by King Abdullah on the state of the economy.
- Reuters
- Published: 21:13 November 29, 2008
Riyadh: Saudi shares surged 9.5 per cent on Saturday, led by blue chips, as investors took heart from a global stock rally and reassuring remarks by King Abdullah on the state of the economy.
"We had a good performance in international markets on Thursday and Friday and this translated into a positive way in the Saudi bourse after the king's statement," said John Sfak-ianakis, chief economist at SABB bank, HSBC's Saudi subsidiary.
King Abdullah said in a published interview that aside from a climate of tension and fear, the global financial crisis did not have a real impact on Saudi Arabia. "Yes the crisis ... created tension and fear ... But as far as the state and state funds are concerned, we have not been impacted," he told a Kuwaiti newspaper.
The Saudi bourse has lost about 51 per cent of its value since oil prices began declining from a record $147 per barrel reached on July 11.
Sfakianakis said the king's statement acted as "a psychological booster to confidence in the local economy". "This market is driven by sentiment ... We had a temporary change of sentiment, but the market could very well go downward again," he said.
Turki Fadak, a member of the semi-official think tank Saudi Economic Association, said the rally indicated that investors were beginning to see the market bottoming out. "There is a feeling in the market that we have reached the bottom especially after we stopped hearing negative news from abroad," he said.
The Tadawul all-share index (Tasi) gained 9.51 per cent to end at 4,845. Saudi Basic Industries Corporation ended up by the 10 per cent limit.
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