RESEARCH ON SAUDI Arabian stocks is at least consistent on one point. The market, say analysts, has reached a trough. Time to revisit is the title of Egyptian investment bank EFG Hermes’s November 6 strategy note on Saudi Arabia.
And well it might be. As 2007 comes to a close, the Saudi stock market’s capitalization, having fallen from a peak of more than SR2 trillion in early 2006, stands at around SR800 billion ($214.5 billion) – much the same as it was at the beginning of the year. The market, say analysts, has gone through a textbook "double bottom" pattern preceding a recovery, with the index sinking below 7000 at the end of January, rising, and then dropping to almost exactly the same point at the end of June. Average valuations are lingering at around 17 times earnings: not a bargain-basement figure, but more reasonable considering the high oil price,...
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