The region's largest bourse has gained 24 per cent this year after losing more than half its value last year as oil prices dropped.
Saudi shares rise
Saudi Arabian shares rose for a third day, led by Saudi Basic Industries Corporation (SABIC) on evidence that global economies are headed for a recovery. The Tadawul All Share Index rose 2.59 per cent to 6094.91. SABIC, the world's largest chemical maker by assets, gained for the third day. Saudi Arabian Fertiliser Company (SAFCO), a unit of SABIC, advanced as much as 3.25 per cent. Almarai, the kingdom's largest food producer, rose for the second day after announcing it would buy an Egyptian agriculture company. The region's largest bourse has gained 24 per cent this year after losing more than half its value last year as oil prices dropped. "The general positive economic data from China and the US is pushing the Saudi market up," said John Sfakianakis, an economist at SABB, based in Riyadh. China's spending on factories, real estate and roads rose 32.9 per cent in the five months to the end last month from a year earlier, a government report last week. A US commerce department report the same day showed retail sales gained 0.5 per cent last month, rising for the first time in three months as shoppers returned to car showrooms. SABIC gained 1.38 per cent to 73.50 riyals on early signs that Europe's chemical industry is recovering. This is marked by the reopening of production lines and factories, the European Chemical Industry Council, a business lobbying group, said yesterday. SAFCO advanced 3.25 per cent to 119.25 riyals. "The rally coincides with high oil prices," said Ayman el Saheb, the director of operations at Darahem Financial Brokerage. "As for banking shares, banks should have had provisions in place [for loan defaults from major businesses], so that should have already been absorbed by the market." A Bank of America-Merrill Lynch report said banks had experienced a downturn but not distress, the system is well regulated and banks offer growth potential. Almarai gained 1.7 per cent to 149.25 riyals after saying it had agreed to buy 100 per cent of the International Company for Agro Industrial Projects in Egypt for 430 million riyals (Dh421m). * with agencies email@example.com