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US stimulus tows Saudi Arabia stocks to 7-week high

RIYADH — Shares in Saudi Arabia rose the most in seven weeks after US stocks advanced for a second straight week on the Federal Reserve’s plan to buy mortgage securities and on higher oil prices.

By (Bloomberg)

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Published: Sun 16 Sep 2012, 10:07 PM

Last updated: Tue 7 Apr 2015, 12:29 PM

Saudi Basic Industries Corp, the world’s largest petrochemical maker known as Sabic, rose to the highest level since May 23. National Industrialisation, an industrial and manufacturing firm, climbed the most since in July 31. Etihad etisalat, a Saudi telecommunications operator, gained the most in a week.

The Tadawul All Share Index gained 0.9 per cent to 7,165.86 points, the highest level since May 13, in Riyadh at 3:30pm. The Arab world’s biggest stock market has increased 12 per cent this year.

The US “stimulus will be a factor domestically as the S&P 500 reached near five-year highs,” Asim Bukhtiar, head of research at Riyad Capital, said in response to e-mailed questions. “We expect positive opening this morning on the heels of strong gains in developed markets over the past two days. Petrochemicals should benefit from $99 crude.”

Equities rallied as the Fed said on September 13 that it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment. Oil climbed to the highest level in more than four months as the Fed’s plan boosted demand for commodities and stocks. Prices increased 2.7 per cent this week and are up 11 per cent from a year ago.

Sabic gained 2.7 per cent to SR95, while National Industrialisation increased 1.8 per cent to SR33.2. Etihad Etisalat rose 1.5 per cent to SR70. —