Saudi Shares Advance on Bets Drop Overdone Given Earnings, Oil - Bloomberg

Saudi shares rose the most in almost a week on bets a drop prompted by investor concern over the European debt crisis is overdone given prospects for earnings growth and as crude oil gained for a second day.

Saudi Basic Industries Corp. (SABIC), the world’s biggest chemicals maker, advanced as much as 1.6 percent. Al Rajhi Bank (RJHI) increased for a second day this week. The Tadawul All Share Index (SASEIDX) rose 0.4 percent, the most since Sept. 7, to 6,062.61 at 2:38 p.m. in Riyadh, trimming a drop in the past month to 1.5 percent. The market has slumped 7.8 so far this quarter on investor worries that global economic growth may slow.

“Debt issues in Europe are not reflective of the fundamentals of the Saudi market although investors are reacting to events there; it’s purely sentiment,” said Asim Bukhtiar, a Riyadh-based equity analyst at Riyad Capital. “If you look at the fundamentals, structurally the market is still sound; earnings in the first half of 2011 were decent and we expect the second half to be even better.”

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