RIYADH, Sept 22: Saudi stocks closed the trading week on Thursday at a lifetime high in heavy trade fuelled by hopes of strong third quarter results and the rise in crude oil prices, traders said.

The all-share index closed at 15,050 points, 0.6 per cent above the previous week. It has gained 83 per cent since the start of the year and more than 465 per cent over the past three years.

Fouzan al-Misfer, team leader at Samba Financial Group’s brokerage unit, said the gains this week were due to abundant liquidity, high demand and prospects of higher dividends, mainly for banking and petrochemicals stocks.

This trend should continue in the coming few weeks, he said. The value of shares traded was almost unchanged from last week at 112 billion riyals ($30 billion).

Significant numbers of investors migrate from one stock to another, or from one sector to another, creating a virtual demand which remains insatiable because of high crude prices, said a Paris-based fund manager who monitors the Saudi bourse.

The trading week, which starts on Saturday, saw the index of the bourse’s heavyweight industrial sector rising 1.04 per cent.

The telecoms sector was up 0.56 per cent and the services stocks index was up 1.9 per cent. The electricity stocks index fell 4 per cent and that of insurance fell 1.5 per cent.

Analysts are increasingly wary of what they call excessive valuation ratios. The Arab world’s largest bourse now has an average price-earnings ratio of around 33, according to al-Misfer.

It’s very scary, said Bishr Bakheet, head of Bakheet Financial Advisors.

The bourse is on an upward trend simply because crude prices are rising. There is no rational argument backing the ratios we are witnessing now other than crude prices and speculation.—Reuters