11/08/2009
Saudi Basic Industries Corp (SABIC) surged to a nine-month high after announcing a $1 billion joint venture on Monday, lifting the Saudi index, but Middle East markets were mixed as investors cashed in recent gains.Saudi Arabia's benchmark climbed 1.9 percent, its biggest one-day rise for two weeks, Dubai added 0.7 percent and Qatar and Bahrain edged slightly higher. But Abu Dhabi, Kuwait, Oman and Egypt all fell, with the latter taking the largest tumble to drop 1 percent.
SABIC jumped 6.1 percent after it agreed to set up a joint venture with Japan's Mitsubishi Rayon that could cost up to $1 billion.
"The agreement is very positive and we're seeing a move from joint ventures to produce simple polymers to complex petrochemical products, which is in line with SABIC's 2020 strategy," said Ankit Gupta, senior research analyst at SICO investment bank in Bahrain.
"But the impact from this deal will not reach the balance sheet until 2013 and so today's stock move is driven by other factors as well, with SABIC's stock underperforming its global peers, while oil prices are holding firm."
Crude was steady, rising 0.3 percent to $71.18 a barrel at 1425 GMT.
Saudi Arabia's SABB Takaful surged 9.9 percent to 42.10 riyals after shareholders approved a capital hike that will give subscribers the stock at a huge discount. The Islamic insurer will increase its capital to $90.66 million from $26.67 million through a rights issue of 34 million shares at 12.5 riyals per share, including costs.
Beside developments with individual stocks, Gulf markets were subdued, despite Asian stocks advancing in early Monday trading, reports Reuters.
