Saudi Shares Fall on U.S.-Iranian Concern; Saudi Basic Tumbles

By Glen Carey

Nov. 8 (Bloomberg) -- Saudi Arabian shares fell, led by Saudi Basic Industries Corp., after U.S. President-elect Barack Obama said Iran's potential development of a nuclear weapon was unacceptable.

Saudi Basic Industries, the Middle East's biggest publicly traded company, tumbled to a four-year low in Riyadh trading. Samba Financial Group retreated and Zamil Industrial Investment Co. lost for the first time in six days.

The Tadawul All Share Index snapped a three-day gain, falling 5.8 percent to 5,732.03 in Riyadh. It has retreated 48 percent this year. The Tadawul is the only Arab exchange monitored by Bloomberg that's open on Saturdays.

``Obama's speech about Iran wasn't good,'' Abdulla al-Aqil, a trader at Samba Financial Group, said in telephone interview in Riyadh today. ``It didn't give comfort to investors.''

Iran's efforts to develop a nuclear weapon were unacceptable, and an international effort should prevent this from happening, Obama told reporters in Chicago yesterday. He also called on Iran to stop supporting terrorism.

Iran wants Obama to review U.S. policy toward the Middle East, citing his promise as a candidate to bring change.

Saudi Basic Industries, also known as Sabic, fell 8.8 percent to a four-year low of 67.5 riyals ($18.5). Samba, the kingdom's second-largest bank, dropped 4 percent to 66.5 riyals after Egyptian Financial Group-Hermes Holding forecast a drop in profit.

``With the decline in equity values across the board, we expect Samba's profitability to remain under pressure in the medium term,'' EFG-Hermes said in an e-mailed report today.

Zamil Industrial Investment Co. declined the most since May 2006, falling 10 percent to 67.5 riyals. The Saudi Arabian investor in building materials, chemicals and real estate, said today it started a 75 million riyal venture with New Delhi Tele- Towers Ltd. to supply telecommunication towers, air-conditioning units and power equipment in India.

To contact the reporter on this story: Glen Carey in Dubai at gcarey8@bloomberg.net.