New York, NY (Bloomberg.com): Credit Suisse Group recommended buying shares of Al Rajhi Bank, Saudi Arabia’s biggest bank by market value, as well as Saudi Arabian Fertilizer Co. and said the country is in a “golden era.”

The brokerage also initiated coverage on Riyad Bank and Almarai Co. with “outperform” ratings. Saudi Basic Industries Corp., the world’s biggest chemicals maker by market value, received a “neutral” recommendation.

“Oil prices are at an all-time high; hundreds of billions of dollars of infrastructure investments are expected to drive growth,” analysts including Mohamad Hawa wrote in a note. “The government is continuing to diversify its hydrocarbon-based economy.”

The economy of Saudi Arabia, the world’s biggest oil supplier, will grow 4.9 percent in 2008, according to the median estimate of seven economists surveyed by Bloomberg in December. Oil has climbed about 80 percent in the past year. Crude oil for June delivery rose as much as $1.77, or 1.6 percent, to $115.23 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Half of Saudi Arabia’s gross domestic product comes from the oil and gas industry.

The kingdom is seeking to build five cities as part of a plan to attract foreign investment and create more than 2 million jobs. King Abdullah Economic City, for example, will be built over 65 square miles of land on Saudi Arabia’s Red Sea coast at a cost of $26.6 billion.

Price Estimates

Credit Suisse now covers 13 Saudi companies, among them seven banks. The brokerage gave four “outperform,” five “neutral” and two “underperform” recommendations. It maintained a “neutral” rating for the two telecom companies that it started covering earlier this year.

Al-Rajhi Bank was rated “outperform” with a price estimate of 112.87 riyals, as was Saudi Arabian Fertilizer, also known as Safco. The price projection for the maker of fertilizers was set at 242 riyals. The shares closed at 96 and 223 yesterday respectively.

Riyad Bank, the kingdom’s fourth-biggest bank, got a price estimate of 99.92 riyals and Almarai, the country’s second- biggest foods company, of 163.58 riyals.

Credit Suisse set a price estimate for Saudi Basic of 174.76 riyals. The shares closed at 149.5 riyals.

Saudi Arabia’s Tadawul All Share Index has declined 8.8 percent this year, while five of the seven Persian Gulf benchmarks advanced. Oman’s index is the region’s best performer so far, having soared 25 percent. In Saudi Arabia, only nationals of GCC states or residents of the kingdom can freely trade the country’s stocks.

Credit Suisse maintained “neutral” recommendations on Saudi Telecom Co., the largest Arab phone company, as well as on Etihad Etisalat Co. and reduced their price estimates.

Saudi Arabia’s exchange is closed for the weekend today.