DUBAI • Saudi Arabia’s bourse rallied to its highest close in almost a year yesterday as record oil prices and an interest rate cut boosted the appeal of petrochemical and banking stocks.

The index rose 2.2 per cent to 8,811.40 points, its highest close since November 7, 2006, according to Reuters data. Saudi Basic Industries Corp (Sabic) climbed 1.52 per cent and Saudi Kayan Petrochemicals Co jumped 9.84 per cent.

Oil price settled at $95.93 a barrel on Friday, close to the record $96.24 hit earlier in the trading week. This improves prospects of strong future profitability among petrochemical firms, said Ibrahim Al Alwan, deputy chief executive at KSB Capital Group.

“As oil prices go up, petrochemical prices go up. This is positive news for investors,” Alwan said.

Banking stocks also rallied, led by Alrajhi Bank, the kingdom’s biggest bank by market value, which rose almost four per cent.

Arab National Bank surged 8.5 per cent, SABB bank 5.56 per cent and Banque Saudi Fransi 3.7 per cent.

Saudi Arabia’s central bank cut its reverse repurchase rate by 25 basis points on Thursday, after a US rate cut the previous day, to try to relieve pressure on its dollar-pegged currency without stoking inflation at home.

Dubai bourse

Non-Arab investors were the only net buyers on Dubai’s bourse in the last week of October, when the benchmark rallied 7.6 per cent to its highest close in 18 months, exchange data showed yesterday.

Investors from outside the Arab region bought Dh3.34bn ($909.6m) worth of shares in the week ended November 1, or 14.4 per cent of total shares purchased, the Dubai Financial Market said in a statement.

They sold Dh1.65bn worth of shares in the week, seven per cent of the total Dh23.25bn worth of shares sold.

Foreigners from outside of the region were the only net buyers in the trading week, buying 1.69 billion dirhams worth of shares, while UAE nationals, Arabs and nationals of other Gulf Arab countries were net sellers.