Top Performing Saudi Exporter Seeking to Restore Deal With Aramco

(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 value 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.

Top Performing Saudi Exporter Seeking to Restore Deal With Aramco

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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