JEDDAH — Saudi Arabia's main share market index rose on Sunday as investors continued to buy beaten-down petrochemical shares on hopes that oil prices may have bottomed out, while most other regional bourses were sluggish.
Brent oil's strong recovery above $50 a barrel last week made investors more comfortable with petrochemical stocks. Sector leader Saudi Basic Industries (SABIC) climbed 3.2 percent to 89.25 riyals on Sunday, while four other stocks in sector were also among the 10 most-traded stocks and saw their prices surge.
Although the outlook for oil and therefore petrochemical prices remains unclear, equity valuations are now seen low enough to interest investors. Analysts' median target price for
SABIC is 106 riyals, according to Thomson Reuters data.
The Saudi stock index rose 1.9 percent to 7,827points in active trade, testing technical resistance at 7,812-7,953 points, its highs in September and at the end of August.
Among other big Saudi gainers, oil shipper Bahri surged 8.9 percent after its net profit for the three months to Sept. 30 came in at 510.3 million riyals, up from 84.85 million riyals in the same period a year earlier. Albilad Capital had forecast 300 million riyals.
Miner Ma'aden added 3.6 percent in unusually heavy trade after saying it had started trial production at the Ad Duwayhi gold mine; the average annual production capacity of Ad Duwayhi was estimated at 180,000 ounces of gold. Commercial production is to start in the first quarter of 2016.
But Almarai, the Gulf's largest dairy company, slipped 0.6 percent after reporting a 10.3 percent rise in its third-quarter net profit to 595.1 million riyals; analysts had forecast 602.9 million riyals.
Other Gulf stock markets were more sluggish. Prices in most of those markets had dropped less than Saudi Arabia earlier this year, and they remain preocuppied by risks such as a worsening of banking sector liquidity and asset quality due to low oil prices, which have reduced flows of state money into banks.
Dubai's market index edged up 0.2 percent in thin trade. The most heavily traded stock, GFH Financial, added 2.8 percent.
At the end of last week Fitch Ratings affirmed the Abu Dhabi's index added 0.4 percent on buying of blue chips such as Aldar Properties, up 0.4 percent, and First Gulf Bank, up 0.7 percent.
