Riyadh: Saudi Arabian shares rose to the highest level in almost eight months, led by petrochemicals and builders, as oil surged to its highest year-end price since 2007 and investors start the year with expectations companies will post encouraging quarterly earnings.
Saudi Basic Industries Corp., the world's largest petrochemical maker, Saudi Industrial Investment Group and Arabian Pipes Co. paced the rally.
The 146-company Tadawul All Share Index rose 0.3 per cent to 6,640.45, the highest since May 15, in Riyadh.
"The price of oil shifted into high gear this past quarter and that has pushed investors to bet big on fattened oil company profits," said Amro Halwani, a trader at Shuaa Capital PSC in Riyadh. "People are pinning in their hopes on growth in corporate earnings as it is starting to look more and more entrenched."
Oil for February delivery climbed $1.54 (Dh5.66), or 1.7 per cent, to settle at $91.38 a barrel on the New York Mercantile Exchange Friday. Prices rose 11.4 per cent in the fourth quarter. Oil ended the year above $90 a barrel for only the second time since the contract started trading in 1983, after settling at $95.98 in 2007. Saudi Arabia holds one-fifth of the world's proven oil reserves.
Major buying activity
Sabic advanced 0.2 per cent to 105 riyals (Dh102.84). Saudi Industrial gained 2.5 per cent to 22.3 riyals, the highest since May 17, Yanbu National Petrochemicals Co. rose 0.8 per cent to 48 riyals.
"Investors also took in some major buying activity in Arabian Pipes following some good news on the name, and that's feeding the sector with positive momentum," said Halwani.
Arabian Pipes surged 9.9 per cent to 30 riyals, the highest since July 11.
