Banks power Saudi index to 2009 high

News of brokered deal between Saad Group and local creditors peps bank stocks.
By Neeraj Gangal
Sat 26 Sep 2009 01:14 PM

Banks led the Saudi bourse to its highest close in 11 months after bankers announced that local lenders reached an agreement with a troubled family-owned conglomerate.

The all-share TASI index closed 3.08 percent higher at 6,130.95 points, its highest level since Oct. 22, 2008 when it closed at 6,160.80 points.

The banking stocks index added 7.94 percent while the other heavyweight petrochemical industry index ended 0.18 percent lower.

Six banks topped the gainers list with SABB bank, Riyad Bank and Samba clocking increases of more than 9.5 percent each.

Saturday was the first trading day after a Sept 16-25 holiday for the Muslim Eid al-Fitr holiday and the kingdom's National Day.

A Saudi government panel has brokered a deal between Saad Group and local creditors that excludes international banks, bankers said on Sept. 17, confirming a report a day earlier by Dubai-based Al Arabiya television channel after market close.

Saad and another Saudi family-owned conglomerate - the Ahmad Hamad Algosaibi and Bros Co (AHAB) -- are at the centre of an estimated $22bn debt implosion.

On Friday, Credit Suisse upgraded six Saudi banks, saying it expected a 16 percent year-over-year net income growth at banks in the kingdom for the second half of 2009, due to their low base aggregate earnings during the second half of 2008. (Reuters)

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