JEDDAH, 25 April 2006 — The Council of Ministers yesterday instructed authorities to take all necessary measures to stabilize the stock market after it plunged several times during the past two months, sending a shockwave through the Saudi investment community.
“The Cabinet instructed the concerned authorities to adopt all measures to bring order to the market, improve its performance and deal with all influencing factors,” the Saudi Press Agency reported, quoting Culture and Information Minister Iyad Madani. The Cabinet announced that the Kingdom would go ahead with its policies aimed at expanding investment opportunities.
“Efforts would be doubled to monitor stock exchange scrupulously and there would not be any leniency in applying laws,” the Cabinet said in an apparent move to boost investor confidence in the market that has fallen 27.74 percent so far this year.
The Cabinet also emphasized the need for publishing accurate information about companies listed on the market. “All measures must be carried out quickly, making use of Saudi and foreign expertise,” it added.
The Tadawul All-Share Index (TASI) rebounded yesterday after falling 7.93 percent on Sunday. The index closed 535 points or 4.43 percent higher at 12,611.74. The market turnover also increased to SR11.66 billion yesterday compared to SR8.33 billion on Sunday. Out of 79 shares traded, 61 were up while 17 were down.
The Cabinet meeting, which was held at Al-Yamamah Palace in Riyadh, discussed the performance of the economy in general and stock market developments in particular before taking corrective measures.
Cabinet members expressed their satisfaction over a World Bank report that placed Saudi Arabia on top of Arab countries in attracting foreign investment. The Kingdom’s position among investment-friendly countries jumped from 67 to 38 as a result of economic reforms.
Custodian of the Two Holy Mosques King Abdullah also called yesterday for peaceful dialogue among nations to end their disputes. During the Cabinet meeting, the king briefed the ministers on the outcome of his talks with Chinese President Hu Jintao, who concluded his three-day visit to the Kingdom yesterday. He said Hu’s visit would strengthen bilateral ties and help reinforce world peace and stability.
The Cabinet voiced its appreciation of Hu’s speech at the Shoura Council and said it reflected the views often expressed by King Abdullah. It emphasized that the growing relations between Saudi Arabia and China would serve the interests of both countries.
Minister Madani also said that the Cabinet reviewed yesterday developments in Iraq and Palestine and expressed hope that the selection of the new political leadership in Baghdad would lead to a real unity government capable of ending Iraq’s present instability.
The meeting also urged Palestinian factions to settle their differences through dialogue in order to win their rights.
