Shares in Saudi Arabia continued their strong upward movement last week, with the bourse now up by 9.2% since the US-led attack on Iraq started, and 4.3% in the past week.
The market pushed higher with big gains by most blue chips. Saudi Electricity jumped after its dividend announcement, while Saudi Telecom and the banks moved sharply higher to recover most of their losses of recent weeks.
Developments in the oil market underpinned investor confidence. Oil prices may be down $10 per barrel on earlier highs but there was a sharp rebound at the close of last week on the realization that the war in Iraq may last for some months rather than weeks.
Saudi investors are clearly relieved that the oil price collapse that followed the release of emergency stocks on to the market in the 1991 Gulf War has not been repeated this time. Indeed, the outlook for sustaining oil prices within the Opec price band of $22-28 in the short term at least is now very good.
As Bakheet Financial Advisers points out in their latest weekly report, WTI oil prices have averaged a very high $34.20 in the year to date compared with $26.20 for 2002.
But BFA warns investors that a prolonged war may yet send the market into retreat. For the time being investors seem more focused on the oil market and its impact on business in the kingdom.
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Saudi shares advance strongly on Iraq War
- Saudi Arabia: Saturday, March 29 - 2003 at 11:35
Saudi stocks surged by 4.5% last week with investors happy about the outlook for oil prices and confident that the Iraq war would have no negative impact on the kingdom.
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Peter J. CooperSaturday, March 29 - 2003 at 11:35 UAE local time (GMT+4)
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