Saudi Arabian Shares Climb as U.S Retail Sales Data Ease Recession Concern
Saudi Arabian shares rallied for a second day, sending the benchmark index to its highest level in 10 days, after U.S. retail sales data eased concern the world’s biggest economy is headed for a recession.
Al Rajhi Bank (RJHI), the kingdom’s largest publicly traded lender by assets, gained the most in five months and Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemicals maker, strengthened the most in almost two weeks.
The Tadawul All Share Index (SASEIDX) rose 1.9 percent, to 6,155.88 at the 3:30 p.m. close in Riyadh, the highest level since Aug. 3, extending its two-day gains to 2.5 percent. The 147-company gauge lost 6 percent in the past week, the steepest decline since the week ending March 2, after the U.S.’s credit rating was downgraded by Standard & Poor’s.
“The Saudi market, in the footsteps of Asian, European and U.S. markets, took a positive reaction to the U.S. retail sales report,” said Akef Al Tanbouz, head of asset management at The Investor Securities in Riyadh. “And oil prices went up over the weekend.”
A U.S. report yesterday showed retail sales climbed 0.5 percent in July, matching the median forecast of 81 economists surveyed by Bloomberg News. The S&P 500 rallied 5.2 percent in the final two days of the week, its biggest back-to-back gain since March 2009.
Crude for September delivery rallied 7.7 percent in the past three days to settle at $85.38 a barrel on the New York Mercantile Exchange yesterday. Saudi Arabia holds one-fifth of the world’s proven oil reserves.
‘Subsiding Anxiety’
“Today we are seeing a relief rally on the market on subsiding anxiety,” Asim Bukhtiar, an equity analyst at Riyad Capital. “Fundamentals of the Saudi market are stable despite international debt concerns.”
Al Rajhi surged 3.3 percent, the largest gain since March 20, to 70.25 riyals, and Sabic soared 2.3 percent, the most since Aug. 1, to 99 riyals. Riyad Bank (RIBL), the kingdom’s third- largest publicly traded lender by assets, jumped 2.9 percent to 24.70 riyals.
The Saudi bourse announced today it will close for the Islamic Eid Al Fitr holiday from Aug. 27 to Aug. 31 and that trading will resume on Sept. 3.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
To contact the reporter on this story: Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net.
To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net.
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