Saudi Shares Tumble Most in Almost Three Weeks on Plunging Crude Oil Price

Saudi Arabian shares dropped the most in almost seven weeks after crude oil capped its biggest weekly decline in more than two years, following the death of Osama bin Laden and a strengthening dollar.

Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemicals maker, dropped for a third day. Al Rajhi bank (RJHI), the kingdom’s largest publicly-traded lender by market value, declined to the lowest level in two weeks.

The 146-member Tadawul All Share Index (SASEIDX) declined 1.6 percent, the measure’s largest loss since March 15, to 6,577.74 at the 3:30 p.m. close in Riyadh. Three shares dropped for every one stock that gained. The volume of shares traded on Tadawul was 281.8 million, the highest level since March 26.

“The market is under pressure due to sharp declines in international oil markets,” said Fuad Aghabi, investment director at Ajeej Capital in Riyadh.

Crude oil tumbled 15 percent from $113.93 a barrel on April 29, the highest settlement price since 2008, after the al-Qaeda leader’s death. Crude for June delivery fell 2.6 percent yesterday to $97.18 a barrel in New York, the lowest level since March 15. Saudi Arabia holds one-fifth of the world’s proven oil reserves.

Sabic declined 2.9 percent to 108.50 riyals. The Riyadh- based company was downgraded to “hold” from “strong buy” at Global Investment House KSCC, with a share-price estimate of 120.1 riyals.

Al Rajhi lost 1.3 percent to 74.75 riyals. National Industrialization Co. (NIC) plunged 3.4 percent, the biggest loss since March 1, to 37.30 riyals.

Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.

The Saudi market may rebound on prospects for stronger economic growth, Aghabi said. U.S. payrolls increased by 244,000 workers last month, the biggest gain since May 2010, after a revised 221,000 gain the prior month, the Labor Department said in Washington yesterday.

“Continued global economic growth will reflect positively on Saudi companies, specifically export-oriented companies such as petrochemicals, in the medium term,” he said.

(Source: http://www.bloomberg.com/news/2011-05-07/saudi-shares-tumble-most-in-almost-three-weeks-on-plunging-crude-oil-price.html)