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Sat 23 Oct 2010 06:22 PM

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Saudi shares rise most in one month led by banks; SABIC gains

Hefty sell off in the banking sector has attracted some 'fundamental value seekers'

Saudi shares rise most in one month led by banks; SABIC gains
RUSH BACK: Investors are optimistic about the banking sectors upcoming quarterly results, which has led to a rush back into beaten down shares (Getty Images)

Saudi Arabian shares rose the most in a month, led by banks on optimism about the earnings outlook.

The Tadawul All Share Index gauge added 0.9 percent, the biggest gain since Sept 20, to 6286.97 at the 3:30 pm close in Riyadh. Banque Saudi Fransi, Samba Financial Group and Saudi Basic Industries Corp. led the advance. Tadawul pared monthly losses to 1.6 percent.

Amro Halwani, a trader at Shuaa Capital, Riyadh, said: “The hefty sell off in the banking sector following disappointing results seem to have drawn in some fundamental value seekers."

He added: “Investors are optimistic about the sector’s upcoming quarterly results, this has led to a rush back into beaten down shares.”

Banque Saudi Fransi rose 5.4 percent, the most since May, to 46.6 riyals. Samba increased 2.5 percent to 62 riyals, the highest since Oct 9.

Sabic, the world’s largest petrochemicals maker rose 2.2 percent, to 92.75 riyals, the highest in four months. Al Rajhi Bank, the kingdom’s largest publicly traded lender by market value, advanced 1 percent to 77 riyals, the highest in almost two weeks.

Red Sea Housing Services Co, a Saudi Arabian company that provides readymade housing units, rose the most in almost two years after saying its order backlog grew more than threefold. The shares jumped 9.8 percent to 44.7 riyals, the highest since Aug. 8.

The Tadawul index fluctuated between gains and losses earlier in the session.

Anas Kassem, an investment analyst at Ajeej Capital, Riyadh, said: “In the short to medium term more mixed bags days like today are expected, with few domestic catalysts available to give the market direction."

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