Saudi rebounds on valuations; caution on oil
Riyadh, August 22, 2011
Saudi's shares rebounded on Monday as investors picked up stocks on attractive valuations after two-sessions of losses that dragged the index to a 23-week low, but global concerns still weighed on sentiment.
Banking stocks edged higher in early trading, with the index rising 0.5 per cent, but turnover was low. Al-Rajhi Bank gained 0.7 per cent and Samba Financial Group climbed 0.9 per cent.
The broader benchmark was up 0.1 per cent to 5,922 points.
'Right now, valuations are looking good and investors are looking at that, but overall, valuations are being ignored because of what's happening internationally,' said Asim Bukhtiar, head of research at Riyadh Capital.
'We're asking investors to look at selective sectors. Sectors operating within Saudi Arabia, their earnings should not be affected,' he noted.
Petrochemical stocks, reacting to volatile crude oil prices should be approached with caution, he added.
Brent crude dropped more than $2 on Monday to around $106 a barrel on the potential for a resumption of exports from Opec-member Libya as a six-month civil war there appeared close to an end.
Petrochemical index the most active by turnover, was down 0.3 per cent. Bellwether Saudi Basic Industries Corp (Sabic) shed 0.5 per cent, Saudi Kayan Petro gained 0.9 per cent and Rabigh Refining and Petrochemical Co advanced 0.2 per cent.-Reuters