DUBAI // Saudi Basic Industries Corporation (SABIC), the largest listed firm in the Middle East, soared to a 15-month high as investors filled up on shares of the petrochemical giant. Investor sentiment was lifted by SABIC's fourth-quarter earnings report, which handily beat analysts' forecasts. After traders took profits late in the session, SABIC ended trading up 0.6 per cent at 89.25 riyals. It reached an intraday high of 91.75 riyals, its highest level since October 2008.
It was the fourth most-traded stock in terms of volume. The Saudi Tadawul All Share Index rose 0.2 per cent to 6,382.04. "A recovery for SABIC means a recovery for the Saudi market as well. It is the largest cap stock and it will certainly help in lifting the market," said Wadah al Taha, a market analyst based in Dubai. "The prices of oil and petrochemical products are expected to be better this year, which means a better financial performance for SABIC."
The Tadawul was the best performing bourse last year, advancing 27.5 per cent. SABIC, after declining to lows of 34 riyals, has almost tripled in the past 10 months. It is up 10 per cent since the beginning of the year. "We expect SABIC to rise in the coming days and months and the Saudi index with it," Mr al Taha said. The company on Tuesday said its fourth-quarter net profit rose to 4.58 billion riyals from 318.2 million riyals a year earlier on the back of higher sales and prices of most petrochemical, plastic and metal products.
SABIC had reported a net profit of 1.81bn riyals and 3.6bn riyals in the second and third quarters, respectively. The company reported a loss of 974m riyals in the first three months of last year, its first quarterly loss since 2001, according to Zawya data. KSB Capital in Riyadh, an investment banking firm, was expecting SABIC to post 4.25bn riyals net profit for the fourth quarter. EFG-Hermes and Shuaa Capital in the UAE had pencilled the profit at 3.2bn riyals and 4.3bn riyals, respectively.
Investor confidence was further boosted by an optimistic prediction from Mohammed al Mady, the chief executive of the firm, who said yesterday the company expected to continue its positive momentum. "There are many predictions, but the majority of predictions is that 2010 will be a reasonably good year," Mr al Mady was quoted as saying by Zawya Dow Jones. @Email:firstname.lastname@example.org