Font Size

- Aa +

Sat 2 Oct 2010 03:32 PM

Font Size

- Aa +

Saudi shares advance as US, China data fuel confidence

Saudi Arabian economy expected to grow 3.5% this year, compared to 2009's 0.6%.

Saudi shares advance as US, China data fuel confidence
SHARES DECLINE: Saudi Arabian shares declined for the fourth straight day as US stocks fell on concerns about Europes govt debt crisis. (Getty Images)

Saudi Arabian shares advanced for the first time in four days as government and industry reports from the US and China fueled confidence in a global and Saudi economic recovery.

The Tadawul All Share Index gauge advanced 0.1 percent to 6,397.16 in Riyadh today. Banque Saudi Fransi, the Saudi lender part owned by Credit Agricole, and Riyad Bank led the advance. Tadawul gained 3.8 percent last month.

Saudi Arabia’s economy is expected to grow 3.5 percent this year, compared with 0.6 percent in 2009, on the global economic recovery and oil prices, Saudi central bank Governor Muhammad al Jasser said at a news conference on Sept 26.

The kingdom may report a 40 billion riyal ($10.7 billion) budget surplus this year, compared with a budget deficit of $18.6 billion in 2009, according to a report last month by Al Rajhi Capital.

US data on Sept 30 showed the economy grew at a 1.7 percent annual rate in the second quarter, faster than the 1.6 percent previously estimated.

A purchasing managers’ index from HSBC Holdings Plc and Markit Economics on Sept 29, showed that manufacturing accelerated in China in September.

Anas Kassem, investment analyst, Ajeej Capital, Riyadh, said: “Generally, the Saudi market will react to more aggressive moves in the US, Europe or Asia."

He added: “It is lacking much conviction whether to be bearish or bullish. Investors have been positioning themselves for third quarter earnings for the last week or so.”

US stocks slipped, halting the longest streak of weekly gains since April, as lingering concerns that Europe’s government debt crisis may threaten the economic recovery.

The Standard & Poor’s 500 Index fell 0.2 percent to 1,146.24 over the past five days, halting four straight weeks of gains. The benchmark for US stocks rallied 8.8 percent in September to erase its 2010 loss.

Banque Saudi Fransi, the Saudi lender part owned by Credit Agricole, gained 1.7 percent to 48.5 riyals. Riyad Bank, the third largest lender by market value, advanced 1.4 percent to 28.7 riyals. Arab National Bank gained 1.7 percent to 42.3 riyals.

Saudi Arabia’s is the only Gulf Arab benchmark tracked by Bloomberg that trades on a Saturday.

For all the latest Saudi Arabia news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.