RIYADH, 3 June 2004 — The Saudi stock market, the biggest in the Middle East with a market capitalization of over SR750 billion and 179 Saudi mutual funds, continues to attract shareholders despite security concerns.
This point was made at the first seminar on the Saudi stock market sponsored by the Saudi British Bank (SABB) and organized by Al-Eqtisadiah, a sister publication of Arab News.
The aim of the seminar, according to Abdulwahab Al-Faiz, editor in chief of Al-Eqtisadiah, was to educate Saudis, especially those new to the stock market, on market parameters, the investment tools available and the impact of market forces on investments.
He said similar events would be held in Jeddah and Dammam as part of an effort to create an awareness among prospective investors, particularly small investors and traders.
The initiative for the seminar came from Prince Faisal ibn Salman, chairman of the Saudi Research and Marketing Group.
In his presentation, Dr. Sulaiman Al-Sakran, professor of economic science at King Fahd University of Petroleum and Minerals, explained the reasons for fluctuations in the Saudi stock market. He said several factors were responsible such as the market’s high liquidity and low interest rates.
He said another problem was that there was no single governing body for the market. The whole thrust of the seminar, according to Dr. Al-Sakran, was to convert the stock market player from being a speculator into an investor.
He said the privatization program would provide more investment options. Already the returns on investments in the form of dividends were in the range of four to six percent.
Dr. Yousuf Al-Zamil, assistant professor at King Saud University, and Muhammad Al-Zoiyan, president of Al-Zoiyan Office for Financial Consultation, spoke on the need for increasing the depth and breadth of the Saudi stock market. They also dwelt on the new regulations that would govern and streamline the functioning of the stock market.
Speaking on behalf of SABB, Al-Hassan S. Goussous, head of investment services, said the seminar was in line with its social commitment to the community. He said the media could play a useful role in enlightening the public on investment options both in the local and other emerging markets.
“The large turnout reflects the keen interest of the community in the stock market, which is a healthy sign. This was evident during the flotation of the Saudi Telecom shares, which saw a dramatic increase in the number of shareholders from 40,000-50,000 initially to over 170,000,” he explained.
