(Bloomberg) -- Saudi Industrial Export Co.., the best performing stock in Saudi Arabia this year, has escaped recent volatility in the kingdom’s market and is seeking a new contract with state oil-giant Aramco.
Increasing demand for sulfur, the company’s main export, boosted results and shares. The stock has soared more than five-fold this year, giving it a market of 1 billion riyals ($280 million). Saudi Arabia’s benchmark stock index has gained 6.7 percent in the period.
“Investors are trying to build a position and the demand for sulfur is higher, this is why the price has increased dramatically,” Chief Executive Officer Hazim Aldosary said in a phone interview with Bloomberg. “We are looking into acquiring” a contract with Aramco again, he said. The company exported Aramco’s products from 1990 until 2014.
Aramco declined to comment.
The stock’s 14-day relative strength index, a widely-followed momentum indicator, shows it trading in overbought territory for a month. Some investors regard a reading of 70 and above as a sign the underlying asset has risen too far, too fast.
The company now aims to export polymers and other petroleum-based products by different local manufacturers, including Saudi Basic Industries Co., which could soon have Aramco as its main shareholder, if a deal with the Public Investment Fund is approved.
If the Saudi Industrial Export is able to regain its heavy-weight client, the bulk of export volume in the coming quarters “will come through from Saudi Aramco,” as well as sulfur-based products from other producers, Aldosary said.
Saudi Industrial Export posted nine-month profit of 12.6 million riyals after a loss of 25.7 million riyals in the year-earlier period. The exporter increased capital last month, raising 54 million riyals in a rights issue.
The shares surged 9.9 percent in Riyadh on Sunday compared with a 0.4 percent drop for the benchmark index.
Bloomberg reached out to three analysts who track Saudi stocks, but none of them could identify a cause for the surge in Saudi Industrial Export shares.
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