JEDDAH, 3 May 2004 — Optimism over strong oil prices and robust company earnings outweighed any fears over security after the April 21 attacks in Riyadh and Saturday’s shootings in Yanbu. Saudi stocks climbed marginally 1.2 percent on Saturday and 1.7 percent yesterday.

The all-share index of the largest Arab bourse closed yesterday at 5,648.49, up from Saturday’s closing at 5,553.24.

After experiencing continuous gains over last 16 weeks, the Saudi stock market retreated last week due to the profit-taking by investors.

The index closed on Thursday at 5,485.46 points, down from 5,562.68 a week ago.

Weekly turnover fell to SR40.4 billion from a record SR49.3 billion the previous week.

Basil Al-Ghalayini, CEO of BMG Financial Advisers, said the market will keep its upward trend despite the recent attacks. He said there are no other avenues for investment in Kingdom except real estate and stock market. “The real estate market is already saturated so the only real source of investment is in the stock market,” he said.

“The market gained despite the attack in Yanbu on one of the contractors of SABIC (Saudi Basic Industries Corporation). This shows the market is getting immune to terror attacks,” said Sankar Kailasam, senior analyst at the Riyadh-based Consulting Center for Finance and Investment.

SABIC lost ground by 0.16 percent on Saturday but recovered yesterday by 0.06 percent. There were 57 gainers and 12 losers on Saturday while yesterday there were 50 gainers and 21 losers.

Saudi Electricity Company was one of the major movers, up by 5.3 percent on Saturday. According to the CCFI, the market is also flooded with news on the increase of capital (through issues of fresh shares) in various companies like Saudi Cables, National Industrialization Company and National Metal Manufacturing and Casting Co.

Yesterday, the banking sector reported a 3.7 percent gain with Riyad Bank leading with a sharp jump of 8.2 percent, the CCFI said.

“The P/E ratio of the companies is currently very good, so the market is expected to rise further in coming days,” Sankar said.

The market posted hefty gains of 78 percent in 2003 and 26 percent until April 22, 2004.