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Saudi Stocks Continue Comeback - ASHARQ AL-AWSAT English Archive 2005 -2017
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RIYADH (AFP) – Saudi stocks surged for the second day after the appointment of a new chief for the Capital Market Authority (CMA) as a top Gulf analyst called for more confidence-boosting measures.

After rising to the maximum limit of 10 percent on Saturday following the appointment of Abdurrahman al-Tuwaijiri to head the CMA, the Tadawul All-Shares Index (TASI) rose 7.7 percent to close at 11,884.25 points at the end of morning trading Sunday.

But the TASI is still 28.9 percent below its end-2005 close and down 42.4 percent on its all-time high of 20,634 points set on February 25.

King Abdullah on Friday sacked the head of the CMA, Jammaz al-Suhaimi, after the index dropped to a 14-month low. Suhaimi had been strongly criticised by traders.

Abdulaziz Sager, head of the Dubai-based Gulf Research Center, welcomed the appointment of a new CMA chief but called for more measures to “prevent the recurrence of such an economic and social disaster”.

“A sea change is necessary in corporate transparency levels. The creation of a clear legal framework, which will deal with those found violating the market regulations, is imperative,” he wrote in an article released by the center.

He also called for educating traders, creating a two-tier trading system to distinguish between big and smaller companies, developing derivative and hedging markets, and the establishment of market makers.

“While the financial and economic impact can be calculated with statistics, the ensuing social and security problems that arose among the masses cannot be measured in tangible terms,” Sager warned.

The Saudi market, the largest in the Arab world, had shed 21.1 percent in the week ending Thursday as investor confidence hit rock bottom.

The market also shed some 350 billion dollars of its peak value of about 800 billion dollars hit late February, seriously impacting millions of small investors, many of whom lost their life savings.

Stock markets in other oil-rich Gulf states, which rose sharply on Saturday on the back of the Saudi bourse, reacted with caution on Sunday.

Dubai Financial Market Index, which rose 9.4 percent on Saturday, dropped 1.3 percent at close of trading Sunday, but remained above the 500-point barrier.

Abu Dhabi Securities Market increased 2.1 percent to close at 3,559.48 points, while Kuwait Stock Exchange rose slightly by 0.7 percent.

Doha Securities Market was up 4.6 percent, while the smaller markets of Bahrain and Oman increased by one percent and 1.6 percent, respectively.