Rajhi helps Saudi rise; banks outperform

Saudi Arabia's index edges higher in early trading, with Al-Rajhi Bank the main support as investors bet on improved sector earnings after a difficult 2009. Rajhi climbs 0.9 per cent and Riyad Bankadds 0.3 percent, helping the bank sector rise 0.3 per cent. The latter rose 15.3 per cent in 2009, while petrochemicals, the other leading sector on the Saudi bourse, surged 70 per cent. Banks have outperformed in 2010, however, rising 13.2 per cent as large fourth-quarter provisions persuade investors that lenders will be able to start afresh this year. Petrochemicals are up 11.5 per cent in 2010. "The banking sector has been leading volumes after it underperformed before," says Saleh al-Onazi, vice-president of Principal Investment at Swicorp in Riyadh. "I think the market will stay around the same levels as Tuesday - we're not expecting any big news, but we should maintain above 6,700. It should be quiet day and move flat to slightly higher." The index rises 0.1 per cent to 6,743 points.