Saudi king slams stock manipulation
JEDDAH - Reuters
King Abdullah. REUTERS photoKing Abdullah has ordered a crackdown on manipulation of Saudi Arabia’s booming stock market, insisting action should be taken if necessary against improper trading by members of the royal family, the daily Alsharq newspaper reported yesterday.
In an unusual message to the chairman of the Capital Market Authority (CMA), the king said trading rules should be applied to everyone including royals, the newspaper reported. The country’s extended royal family has thousands of members.
“With the current return of investors to the stock market, there has been a return of some violations that require investigation and accountability, requiring violators’ cases to be looked at by the specialised legal authority,” the newspaper quoted the king as telling Abdulrahman al-Tuwaijri.
King Abdullah was also quoted as saying some of the violations were being committed by members of the royal family, who had continued their actions despite warnings, putting them in a position to be investigated and even taken to court.
A spokesman for the CMA declined to comment.
Saudi Arabia is a monarchy with no elected parliament, and the most senior positions are occupied by high-ranking royals, some of whom also have extensive business interests.
The country’s stock market has soared this year and trading turnover has increased several-fold because of strong economic growth on the back of high oil prices, hopes that authorities will open the market to direct foreign investment, and an influx of speculative money.
The benchmark index is up 19 percent since the end of last year, though it pulled back 1.8 percent on Sunday and continued sliding on Monday as word of the Alsharq report reached investors, traders said.
The market, which is the largest bourse in the Arab world, crashed in 2006, hurting tens of thousands of Saudis, many of whom blamed the government for not protecting them from the clout of big investors.
The CMA subsequently imposed hefty fines on some violators of trading rules. The government has become more anxious to preserve social stability since last year’s Arab Spring uprisings in the Middle East, although Saudi Arabia largely escaped serious unrest.