Saudi Arabia's stock index ended higher for a seventh session, reaching a new six-month high as investors bought on hopes of double-digit profit growth for 2012 as well as expectations the bourse will allow direct foreign ownership. Eight of the 10 largest stocks gained. These included Saudi Basic Industries Corp (SABIC), up 1.1 percent, telecoms operator Etihad Etisalat (Mobily), up 2.6 percent, and Kingdom Holding, up 1 percent. "Valuations are attractive, with some stocks at record low PEs (price-to-earnings ratio) and the worst-case scenario is that listed companies' profits will grow 10 percent this year," said Hesham Tuffaha at Bakheet Investment Group head of asset management. "Listed companies' combined profits rose 25 percent last year, but the market actually fell. As political issues take a backseat, company fundamentals will take over." The stock benchmark Tadawul All Share Index climbed 1 percent to 6,626.o4 points at close Tuesday, its highest finish since July 9. The benchmark fell 3.1 percent in 2011, while the Saudi economy is estimated to have grown 6.7 percent over the same period. In December, two sources said that Saudi Arabia plans to open up its stock market, but will limit direct foreign ownership to investors with at least $5 billion under management and allow each to hold a maximum 5 percent of a stock's issued share capital. Such a move would boost liquidity and probably valuations. "There's no doubt the Saudi market will open up to foreign investors, but we don't know when that will happen," Tuffaha said. Elsewhere, Dubai's benchmark also advanced, climbing 2.1 percent to 1,436 points in its eighth gain in nine sessions. Abu Dhabi's index rose 1.3 percent to 2,454 points, its highest close since Dec. 12.
