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Sat 13 Mar 2010 08:48 PM

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Saudi shares hit 17-month closing high

Kingdom plans to launch stock market index funds accessible to foreigners by the end of March.

Saudi shares hit 17-month closing high
SHARES RISE: Saudi shares rose in the weeks first day of trading, led by Saudi Arabias biggest bank. (Getty Images)

Saudi Arabia's index reached a fresh 17-month closing high as firm oil prices and expectations for increased foreign involvement boost sentiment.

Saudi Electricity Co rose 1.6 percent, while Al-Rajhi Bank and Saudi Basic Industries Corp (SABIC) each added 0.5 percent. These are the three largest stocks on the index.

Saudi Arabia plans to launch stock market index funds accessible to foreigners by the end of March in a bid to open up the Arab world's biggest bourse, the market regulator's chief said in remarks published on Sunday.

"The market has been increasing for the past two months, supported by oil prices and bank results," said Hesham Abo-Jamee, Bakheet Investment Group head of asset management.

He said more accessibility for foreign investors will boost market turnover, with Saudi Arabia's upbeat macroeconomic story proving a magnet for non-Saudi players.

Oil ended Friday above $81 a barrel, while China reported a 28 percent rise in oil demand in January, which also points to rising demand for petrochemical products.

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