Saudi shares climbed for a third day on Saturday, led by petrochemical companies and banks, after U.S. stocks posted the biggest weekly rally in two years after Greece took action to avoid a default.
The Tadawul Index rose 1.2 percent to 6,653.68 at the closing time in Riyadh, its highest closing level since June 6. The largest bourse by market value in the Middle East has gained 0.5 percent so far this year.
World’s largest petrochemical maker, Saudi Basic Industries Corp. (SABIC) and Al Rajhi Bank paced the gains. Saudi Arabian Mining Co. (Ma’aden) rose for the fifth day after announcing financing for an aluminum project the company is developing in a joint venture with Alcoa Inc.
UAE bources also advanced last day of the previous week on the news about the extension on residency visas for property investors up to three years.The decision of the UAE cabinet was positively met by investors and market players.
The global markets optimism is evident after Greece avoided a default on its debt. U.S. and European stocks rose this week after Greek Prime Minister George Papandreou on June 29 clinched enough votes to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off default for his debt-laden nation. Lawmakers backed a bill on June 30 to authorize the measure. The S&P 500 surged at 5.6 percent to 1,339.67. The Dow Jones Industrial Average advanced 5.4 percent to 12,582.77 last week. Both indexes rose all five days for the biggest weekly gains since July 2009.
Following the global markets, Gulf markets are very much likely to perform on the upside. Local shares may also be supported by expectations for positive second-quarter results. DFM and ADX listed companies will start to release quarterly earnings results later this month.