RIYADH, 2 October 2004 — The Saudi share index rose 1.1 percent to a fresh record in the week to Thursday as surging oil prices once again drove the Arab world’s biggest bourse up, traders said.
The all-share index climbed to its highest ever close of 6,593.76 points from 6,519.13 a week ago.
The index is up 48.6 percent this year after rising 76 percent in 2003. Turnover fell to SR40.7 billion from ($10.9 billion) SR43.5 billion last week.
Traders said strong oil prices and hopes for economic liberalization in Saudi Arabia should help stocks hold their gains next week, perhaps pushing them higher.
“Amid an overall optimistic mood by investors, supported with good oil price levels as well as the coming activation of a new capital markets law, we expect the Saudi stock market to keep advancing in the next week,” Bakheet Financial Advisors (BFA) said.
The two largest listed companies, Saudi Basic Industries Corp. (SABIC) and Saudi Telecom Co., both rose strongly this week on the back of expectations of strong third quarter results, Bakheet said.
SABIC rose 2.6 percent to SR595 and Saudi Telecom rose 2.4 percent to SR494. The two firms together represent 38 percent of market capitalization.
The gains in big blue chip stocks outweighed falls by many smaller firms. Overall falling shares outnumbered gainers by 44 to 26. Two stocks ended the week unchanged.
High oil prices have pumped money into Saudi Arabia, the world’s biggest crude exporter, boosting corporate profits and government spending.
Bankers say the 18-month rise in stock prices continues to draw new Saudi investors to the market.
The government has approved a markets law that is expected to encourage more companies to list on the bourse and allow international banks to win investment banking licenses.