Saudi stocks hit 4-month high

Saudi Arabia’s shares hit a four-month high, boosted by petrochemicals and banking stocks as attractive dividends draw investor interest. The index rose 0.66 percent to close Wednesday at 6,330.01 points, hitting its highest since Aug. 6. Bellwether Saudi Basic Industries Corp (SABIC) rose 1.3 percent. Saudi International Petrochemical (Sipchem) gained 2.6 percent in heavy trading after it proposed a cash dividend of SR1.25 per-share ($0.33) for 2011, according to a bourse statement. Traders now believe gas subsidies to petrochemical producers will remain at current levels for the next year, having previously thought these subsidies could be cut, said Turki Fadaak, head of research at Al Bilad Investment. “There is talk that contracts will be extended,” he said. Saudi insurance firm Allianz SF jumped 9.3 percent after saying its founding shareholder Allianz France International will merge with Allianz France, according to a bourse statement. “Even though it has no impact on the financials of the company, the market has a very positive response,” Fadaak said. Saudi Hollandi Bank rose 2.2 percent. The lender said it would ask shareholders to approve a capital increase by 20 percent through a bonus share issue. It also proposed a cash dividend of SR1-per-share for 2011. Elsewhere, Kuwait’s benchmark ended 0.2 percent lower at 5,812 points, while Oman’s bourse ended flat. Dubai’s benchmark slumped to its lowest close in seven years in muted trading activity and Abu Dhabi’s bourse also fell amid a lack of catalysts. SAUDIGAZETTE .