Saudi stocks rose to their highest level in almost eight months yesterday as the earnings season in the kingdom got under way.
The Tadawul All-Share Index gained almost half a per cent as one of the country's biggest cement producers posted a jump in earnings for the final quarter of last year. Yamamah Saudi Cement closed at 52.75 Saudi riyals, up almost 1 per cent, after it reported that preliminary fourth-quarter net income had risen 10 per cent from a year earlier to 160 million riyals (Dh156.7m).
The Saudi index of 146 companies closed at 6,729.60, up 0.49 per cent, as investors anticipated year-end dividend payouts, and amid "positive" sentiment in the wider economy.
"The Saudi economy is on a solid base," said John Sfakianakis, the chief economist at Banque Saudi Fransi. "For sure 2011 will witness higher growth than 2010. Against that, the corporate world will fare better."
A total of 74 stocks rose, while 48 fell and 24 were unchanged.
The strongest gainer was Saudi Arabian Mining, the state miner known as Ma'aden, which advanced by 7.4 per cent, its largest one-day gain since May.
"Ma'aden is a company that has a lot of depth and sustainability given that it is operating at lots of different levels in the mining sector," Mr Sfakianakis said.
Other risers included the Saudi Arabian Fertiliser Company, which was up 2.84 per cent, and Samba Financial Group, which rose by 1.25 per cent.
News that 103,000 jobs were created in the US last month, which was below predictions, was said to temper gains on the Saudi market. But a drop in the price of oil after the US labour department news would not have had a dramatic impact on the Saudi share market, Mr Sfakianakis said.
"Oil at $88 is as good as $91," he said.
Mr Sfakianakis said the rise in the Saudi market might have a positive influence as the other Gulf markets begin trading this morning. But he played down the strength of the link between trading on the Saudi market and other bourses in the region.
"I think regional markets could maybe be beneficiaries of the short-term upswing in the market … But I wouldn't put a lot of emphasis or expectation on this," he said. "I don't think the linkage is so tight between Saudi and the rest of the Gulf."
