Saudi Shares Hit 18-Month High After Sabic ‘Buy’ Rating, Safco

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Saudi Arabian shares climbed to an 18-month high, led by petrochemicals companies, after Saudi Basic Industries Corp. was raised to “buy” at Nomura and Saudi Arabian Fertilizer Co.’s profit increased.

Saudi Basic, the world’s biggest chemicals maker by market value and known as Sabic, rose to the highest in six months. Saudi Arabian Fertilizer, a Sabic unit known as Safco, gained the most in a year. Saudi Arabia’s Tadawul All Share Index increased 1.4 percent to 6,868.83 points, the highest since Sept. 28, 2008.

“We expect Middle East petrochemicals to offer strong incremental uplift to margins and earnings growth from capacity expansion and demand recovery,” Nomura said in an April 8 report. “We see Sabic and its joint-venture companies offering some of the best incremental profitability profiles within our coverage, which may partly reflect its low-cost growth and scale.”