Oil recovery lifts Saudi stocks

It was all about oil on the Saudi stock exchange today as the commodity rallied above $35 for brief periods, on support from a weaker dollar combined with hopes of a possible cut in crude production. 

“The global equity market has become a hostage of oil movement. The correlation is immensely in tandem and it fuels the investor’s appetite for the riskier asset,” Naeem Aslam, chief market analyst at Ava Trade, said in a note.  

Although the Tadawul All Share Index (TASI) closed 0.8 percent higher at 5,973, it trimmed most of its early gains towards the end of the session, mirroring a downward pivot in Brent crude prices. The benchmark had jumped 2 percent over the 6,000 level within minutes of opening.

The benchmark crude—a key component for pricing the region’s exports—is now trading nearly 1 percent lower at $34.70. The American benchmark, WTI, is trading 0.5 percent higher at $32.44. 

On Tadawul, food companies advanced with the sector sub-index closing over 2.7 percent higher. Savola Group led the gains, adding 4.6 percent to SAR 39.40. 

Elsewhere, dividend news boosted a couple of names. Jarir Marketing gained 3.4 percent after its board recommended a 19.5 percent cash dividend for Q4-2015, taking the full-year payout to SAR 7.71 per share.

City Cement rose a more modest 0.4 percent. Its board proposed a cash dividend of SAR 0.25 per share for Q4-2015, taking the full-year dividend to SAR 1.25 per share.

Write to Brinda Darasha at brinda.d@argaamplus.com