Petchem shares send Tadawul 1.7% higher

Saudi Arabia's stock market posted its biggest daily gain in four months on Monday as oil prices surged, while shares of Dubai's property developers rose before a major exhibition for the industry this week.
The Tadawul All-Share Index (TASI) rose 1.7 percent to 6,204 points, and trading volume grew by more than half, as Brent crude futures jumped almost 5 percent before a news conference at which Saudi Arabia and Russia said they would cooperate in oil markets.
The two countries said they would not act immediately, and many analysts doubt the agreement will make much difference to oil prices in the long run. But oil's surge was enough to boost Saudi petrochemical shares, with bellwether Saudi Basic Industries Corp. gaining 2.7 percent. 
Also aiding sentiment was a purchasing managers' survey that showed growth in Saudi Arabia's non-oil private sector hit a 12-month high in August, suggesting the economy may be stabilizing after a slowdown driven by low oil prices and government austerity measures.
The positive mood spilled into other sectors. Saudi British Bank jumped 4.8 percent to SR19.80.
"The market seems to be bouncing from 6,000 points, supported by developments in the oil market. Over the last several weeks, the market has been pricing in negative economic expectations, and the recovery in oil is a nice positive surprise," said Mohammad Al-Shammasi, chief investment officer at Riyadh-based Derayah Financial. 
Some banks, depressed by concern about Saudi Arabia's economic slowdown and the threat of bad debt in the slumping construction sector, are trading below what analysts consider to be fair value. SABB, for example, is at a 21 percent discount to the mean target price of 10 analysts polled by Reuters. 
Emaar, The Economic City surged 4.5 percent in unusually heavy trade. The stock is now up 8.2 percent since Sunday, when Reuters quoted a source as saying Saudi Arabia's top sovereign fund, the Public Investment Fund, was in talks to invest in King Abdullah Economic City, the huge project being developed by EEC.

Source: Arab News