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Saudi shares over valued

The average Saudi stock is trading at 35 times forecast earnings for 2005, and more than triple the average of 11.2 for the Morgan Stanley Emerging Markets Index, according to Shuaa Capital cited in a Bloomberg report. The Saudi bourse overtook South Korea and Taiwan in June as the world's biggest emerging stock market, but analysts say share prices have outstripped earnings to the point that a major correction is likely.