(MENAFN - Arab News) A positive outlook for earnings and oil prices lifted the Saudi stock market to more than 3 1/2 years high yesterday. Oil prices posted on Friday the biggest quarterly gain since the beginning of 2011
The Tadawul All-Share Index climbed 0.67 percent to close at 7,835.15 yesterday. The index, which has gained 22 percent so far this year, touched 7,852.85, the highest level since Sept. 13, 2008.
"The reason for this rise is clearly noticed by the high volume we witness in Saudi market," said Hisham Tuffaha, division head - asset management at Bakheet Investment Group, said.
"The market now is adding more momentum amid the strong buy-liquidity from investors on the attractive P/E of 14 times," he added.
Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said the optimism is supported by attractive market and economic fundamentals and a very positive earnings outlook.
"It has further benefited from the clear reduction in risk aversion globally as there has been a relative lull in the euro zone crisis and some slightly better data from the US," he said.
Kotilaine, however, said: "The main source of concern is the seeming influx of cash from other asset classes, most notably land. But right now, there is little to suggest that the positive trends are much more than delayed catch-up with the strong economic realities."
Over 635 million shares changed hands in turnover of SR13.28 billion.
The 50-day average for trading volume is closer to 546.4 million shares.
The simplest reason for the revival of the market has been the return of investor confidence, Jadwa Investment said in its latest report.
Jadwa forecasts the TASI will end the year 2012 at 8,050 points.