JEDDAH, 4 February 2006 — As a measure to curb widespread stock market speculation, the Saudi Capital Market Authority (CMA) announced yesterday that a new unit of price change in the stock prices would begin today. The Saudi stock market (Tadawul) will no longer accept bids in 25-halala (quarter-riyal) increments. The new price unit is one riyal.
Stock market analysts and CMA officials believe that the new price unit will benefit the market by helping to curb speculation since the number of operations on share trading will be reduced.
Traders benefited from the low price unit of 25 halalas when they speculated because it allowed them to make four bids before the change in the bids reaches one riyal. With the new one-riyal price unit, the number of trades is expected to be reduced to one quarter.
