JEDDAH, 8 October 2006 — The Capital Market Authority (CMA) made efforts to reduce confusion associated with the debut of the Emaar Economic City stock on the Saudi Tadawul yesterday. Nonetheless, investors — men and women, young and old — squeezed into ATM rooms and queued up outside most branches of Riyad Bank and National Commercial Bank, the underwriters and financial advisers of the initial public offering (IPO), in hopes of making large profits.

The CMA’s decision came with growing concern over the technical and social catastrophe that took place last February as a result of the listing of Saudi petrochemical company Yanbu National Petrochemical Co. (Yansab) on the Tadawul All-Share Index (TASI). A rush of simultaneous sell orders flooded the system amounting to a crash of the TASI.

In an attempt to increase security, CMA reserved a unique time for Emaar trading outside the regular Tadawul trading schedule from noon to 4 p.m.

There was speculation recently that Emaar’s listing would skyrocket prices opening at as much as SR100 initially. But hours before yesterday’s opening session, there were rumors that the stock prices would continue upward into the SR500 margin in the short four-hour trading period.

As a result many investors had mixed feelings regarding Emaar’s performance. “I bought shares of Emaar in each of my five children’s names and I have come to the bank today wishing to make a good profit for their futures,” Selma Zahrani, investor at the NCB ladies branch, told Arab News. “So far it hasn’t made a big enough move to make me sell. So I am waiting here as long as I can to watch the screen and the situation,” she added.

Arab News asked senior vice president of Financial Transaction House in Jeddah, Eyad Shaqsah, his opinion of Emaar. “It’s still a bit early to tell but I think that investors should be pleased with their investment of SR10/share increasing to SR40 which gives each shareholder a 300 percent profit, quite a substantial return,” he said.

The reason for flared nerves comes on the back of a huge call for increased consumer spending resulting from simultaneous expenditures on back-to-school supplies, Ramadan necessities, and the upcoming Eid Al-Fitr holiday. The economic blow has been felt around the Kingdom bringing some families without extra savings to the brink of near bankruptcy. “I have learned my lesson from the past that at this time of the year I have to maintain a strict budget,” said Omer Mohammed, a Saudi father of seven.

Emaar’s activity proved to be roller-coaster reopening at SR40.00 at noon. The price quickly rose to SR49.75 that was soon doused by the flood of sell orders that threw prices down to the SR41-SR43 range. By 2 p.m. the stock price had further fallen to its original SR40.00. It continued its downward spiral into the SR31.75-SR32.00 territory and finally closed at SR30.50 at the end of the trading session at 4 p.m.