JEDDAH, 10 April 2006 — The Saudi Capital Market Authority (CMA) has suspended two dealers for manipulating stocks of three companies.
The CMA said in an announcement yesterday that the dealers, who were not identified, tried to manipulate shares of Al-Mawashi Al-Mukairish United Co., Alujain and Saudi Electricity Co. (SEC), which are most active speculative stocks in the market.
The CMA said after completing the investigation the dealers will face charges before an arbitration panel.
The CMA statement said the two dealers “carried out large sell and buy transactions in the shares of the firms to create a false impression about the prices of the shares of the firms and the volumes, a practice regarded as a form of fraud and manipulation.”
In January, the CMA fined three stock traders SR169.2 million for violating regulations while dealing in the shares of eight companies, including SEC and Riyad Bank.
However, the suspension of dealers failed to give a boost to the Saudi stock market yesterday. The Tadawul All-Share Index (TASI) dropped 173.94 points to close at 17,557.02.
The market turnover increased to SR24.64 billion yesterday compared to SR16.25 billion on Saturday.
After CMA’s announcement, shares of Al Mawashi Al Mukairish United Co. gained 9.57 percent to SR25.75, Alujain by 6.76 percent to SR312 and SEC by 7.95 percent to SR163.
Shares of Saudi Telecom Co. (STC) and Etihad Etisalat fell yesterday by 3.87 percent each to SR230 and SR136.50, respectively.
In the cement sector, shares of Qassim Cement rose 3.51 percent to SR1,614.75, while shares of all other companies declined yesterday.
Trading in four banks, which was suspended after a glitch on Saturday, resumed yesterday. Shares of Al-Rajhi Bank, Saudi Hollandi Bank and Samba Financial Group fell yesterday while shares of Bank AlJazira rose 4.32 percent to SR386.
The CMA recently granted brokerage licenses to companies to improve standards and transparency in the bourse.
