The Tadawul (Saudi Stock Exchange) rose 1.2 per cent on 5 November after John Kerry, US secretary of state, announced that the US’ ties with Saudi Arabia are “strategic and enduring”.

Monthly performance of the Tadawul

His comments were made during a visit to the kingdom, following criticism by Saudi officials over the US’ Middle East policy.

Regulatory approvals of two initial offerings added to the positive sentiment in the market. Building materials firm Bawan Company was given the go-ahead to launch its offering on 27 November, while Astra Food Company will start on 18 December.

The stock market’s performance since early October has generally been positive, with the main index rising 2.1 per cent in a response to companies’ third-quarter financial results announcements. That has led to year-on-year gains totalling 20.3 per cent on 5 November.

“A key trend in the past few quarters is the declining proportion of net income coming from the petrochemical sector – the sector contribution decreased from 42.5 per cent in the third quarter of 2011 to 29.8 per cent in the third quarter of 2013,” says a report by the Riyadh-based NCB Capital. “The proportion coming from the banking sector increased from 24.5 per cent to 24.7 per cent for the equivalent period.”

During the same period, the contribution of net income coming from the telecom sector has increased from 8.5 per cent to 15.3 per cent, though that is mainly led by Saudi Telecom Company, the report notes. Energy and utilities increased from 8.5 per cent to 9.6 per cent.

While stocks in Saudi’s core economic sectors have performed solidly – petrochemicals and banking and financial services registered growth of nearly 15 per cent year-on-year – the non-hydrocarbons sectors were what lifted the index to higher levels.

The sector with the highest stock market growth is hotels and tourism, which gained 107.2 per cent over the past year, followed by retail (53.4 per cent), real estate development (41.8 per cent), agriculture and food industries (30.1 per cent), and cement (24.4 per cent).

The largest drops were seen in insurance (-26.1 per cent) and media and publishing (-11.2 per cent).

The kingdom’s top stocks by market capitalisation have all registered yearly increases, with the exception of Saudi Arabian Fertiliser Company (-3.1 per cent).

The kingdom’s largest company, Saudi Basic Industries Corporation (Sabic), posted a year-on-year increase of 14.5 per cent, Saudi Telecom rose 15.2 per cent, Kingdom Holding rose 4.3 per cent, Etihad Etisalat rose 21.9 per cent, and Saudi Electricity Company (SEC) rose 1.9 per cent.

Banks’ performances varied, as Al-Rajhi Bank increased 14.6 per cent, Samba Financial Group rose 11.9 per cent, Riyad Bank rose 24.3 per cent, and Sabb rose 31.3 per cent.

Saudi-listed companies have a combined market capitalisation of $439.8bn.