RIYADH, 27 February 2005 — Saudi shares set a new record high yesterday, driven by strong oil revenues that have boosted corporate earnings and the cash holdings of investors.
The all-share index of the largest Arab bourse rose to 8,945 points in early trading, a gain of 0.9 percent from Thursday’s close of 8,867.
“The earnings growth of companies has lifted the market,” said Muhammad Malick, senior economist at National Commercial Bank.” He said corporate earnings for 2004 were expected to rise around 50 percent. “There is big demand for shares in Saudi companies, many of which have posted excellent results,” said Bandar Al-Ahmadi of Samba Financial Group.
US crude oil prices recently crept above $50 a barrel, boosting the economy of the world’s biggest crude oil exporter. “The performance of the domestic economy is fuelling the buying spree. There is ample liquidity in the market and the market is an easy vehicle for investment at the moment,” said Malick.