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Sat 28 Feb 2009 12:56 PM

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Saudi shares hit 3-month low

The all share price index closes down 3.47% after US oil prices fell 1% on Friday. 

Saudi shares closed at their lowest level in more than three months on Saturday as a worse-than-expected contraction of the US economy raised fears over prospects for the kingdom's petrochemicals industry.

The all-share index finished 3.47 percent lower at 4,384 points, its lowest close since November 23.

"This is a reaction to the contraction of the US economy," said Turki Fadak, head of the Arab Centre for Financial Consultancy.

The petrochemicals sector index meanwhile posted the biggest loss after shares in Saudi Basic Industries Corp gave up 6.87 percent - their lowest in three years.

Government data showed US gross domestic product shrank 6.2 percent in the fourth quarter versus a year earlier, marking the deepest slide since 1982 and outpacing analyst forecasts for a 5.4 percent contraction.

"This announcement delays further prospects for a global economic recovery and this hurts the petrochemicals sector especially SABIC," Fadak said.

"Investors are lowering share prices, especially for the petrochemical stocks which account for 25 percent of the total free-floating shares available in the market," he added. (Reuters).

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