Stocks in Saudi Arabia climbed 0.44 per cent yesterday after analysts projected strong economic growth next year and a major Saudi petrochemicals company announced a deal to build a polyethylene plant in Jubail, a city in the kingdom's eastern province. The news that Saudi Kayan Petrochemical had signed a letter of intent with Daelim Industrial of South Korea to build the plant helped push the company's shares up 1.9 per cent. Saudi Basic Industries Corporation (SABIC), an affiliate of Kayan in the Jubail complex, saw its shares rise 1.81 per cent on the announcement.
SABIC shares were also helped yesterday by an announcement that the firm sees an end to disputes with India and China over anti-dumping measures. The petrochemicals sector posted the biggest gains of the day on the Saudi bourse, rising 1.32 per cent. Insurance firms were also among the top gainers, with Saudi Arabian Co-operative Insurance Company rising 7.22 per cent and Gulf Union Co-operative Insurance up 6.19 per cent. Shares of Weqaya Takaful Insurance and Reinsurance gained 4.17 per cent, and Walaa Insurance added 3.62 per cent.
Shares were also buoyed by a report yesterday from EFG-Hermes, an Egyptian investment bank, that projected 4.1 per cent real GDP growth next year on the back of rising domestic demand for goods and services. EFG-Hermes forecast 4.5 per cent growth for 2011, thanks to a growing non-oil sector, healthy government investment initiatives and private consumption. "We expect a notable improvement in the economy in 2010 and 2011," said Monica Malik, an EFG-Hermes economist. "Along with net exports making a positive contribution, we also expect to see a pickup of domestic drivers, especially as government projects announced in 2009 start to be implemented."
Also yesterday, Saudi Hollandi Bank raised more than US$193 million (Dh708.9m) from the sale of its second Islamic bond, said a Reuters report citing sources familiar with the deal. It was the first sukuk to be issued in the region since Dubai World said last month it would seek a standstill with creditors on $26 billion of debt. * with agencies