London, Asharq Al-Awsat-The surge in Arab stock markets, has forced media outlets to dedicate significant coverage following these shares, which have reached an unprecedented level of avidity especially in Saudi Arabia and other Gulf countries. In those countries, the market absorbed a significant amount of financial liquidity. In some cases, investors have quit their day jobs, liquidated their assets in hopes of getting a piece of the lucrative stock market pie.

Capitalizing on this trend, newspapers that were dominated by political stories have seen economic related headlines featured heavily on their front pages. Moreover, many television news channels have begun to offer specialized financial programs with some adding news bulletins highlighting the latest fluctuations in the stock exchange.

In Saudi Arabia, for example, the stock market boom has attracted more than three million investment portfolios that according to official statistics included half of the country’s citizens in addition to the increase of subscription over the last two years and the first quarter of this year. The interest in the stock exchange coincided with a number of giant developments witnessed by the Saudi economy. It is expected that by the end of 2006, the Saudi economy would exceed 1.4 trillion Saudi Arabian Riyals (SAR), and by the end of 2007, it would exceed 1.7 trillion SAR. This would make the Saudi economy one of the world’s twenty strongest economies.

The stock market has become a popular topic of conversation amongst the young and the old and amongst men and women in Saudi society. Considering all these developments, has the Arab media developed itself enough to cover this phenomenon efficiently?

Undoubtedly, the Arab media outlets have tried to benefit from following the stock market since it began to rise until it crashed on 25 February, when shares lost more than 50% of their market value. The media did this by allocating slots to financial analysts despite their division on what happened to the market over the past two months as some described it as a crash whilst others described as the market correcting itself after prices rose with no solid financial results to back this increase.

This contradiction among financial analysts caused great confusion with investors;

Did the drop reflect a crash from which it would be difficult to recover quickly, or does it simply indicate a market correction after which the index would rise again in light of the flourishing Saudi economy, which is expected to continue to grow for the next five years? The latter trend is more likely in light of the unprecedented boom in oil prices in addition to the Saudi government’s structural reform.

Did specialized Arab journalists contribute during the boom, or do they simply present the daily report of the stock market, coupled with the input of an analyst without actually understanding the actual analysis? According to Dr Abdul Rahman Al Barak, Assistant Professor of financial management in King Faisal University in Dhahran, many analysts who appeared in the media recently were unable to provide an efficient analysis that would truly benefit the investor. He pointed out that the disagreement whether the drop was an actual crash or just a correction was false. He said that the fall was clearly a crash just like what had happened seven times in the United States (the last crash was in 2000) and in Japan in 1982 as well as in other markets.

Al Barak placed the responsibility on the shoulders of the media in general and on satellite news channels in particular for the contradiction between the so-called financial analysts who have manipulated the minds of investors. He asked, “Where is the media’s honor?” He called upon the concerned authorities in both the Information Ministry and the Capital Market Authority to direct the Saudi media including that which is based outside of the country, to choose well-qualified analysts and journalists. However, he noted that the press was more balanced than satellite news channels. He also urged the establishing of an association for financial analysts that could assess those who want to write as specialized journalists and financial analysts. He expressed his expectation that such an association would be as successful just as the one that was founded for legal accountants. It was able to re-arrange legal accountancy in Saudi Arabia in a brief period by excluding unskilled legal accountancy offices.

On his part, journalist Abdulaziz Al Swaeid saw that there are few specialized qualified journalists in financial and economic matters. He noted that most local newspapers were late in their news coverage of the stock markets. He even pointed out that some major papers foresaw the crisis but chose to remain silent. He explained that this abstention goes back to his belief that business etiquette plays a role, using as proof the case of a few banks, which were not discussed until recently with reserve. However, Al Swaeid believed that generally, the Saudi press fulfilled its duty, “better late than never,” he said.

Al Swaied clarified that parts of the media look for analysts to work free of charge, therefore attracting only those who are available or were seeking to elevate their profile. He added that those outlets do not plan well. He said, “Show me a single financial analyst who is a full time employee at a news channel or newspaper. Al Swaeid also said that the problem is that the press is presently run by conventional editors who still think in terms of employing freelance contributors and exclude specialized journalists. He noted that financial experts are few and their salaries are high but the press depends on a group of amateurs. He added, “we have some journalists who have some knowledge of financial and economic matters who do their best. Sometimes they are right and at other times, they are not. However, their bosses are mainly responsible. You also know that the economists, analysts, and journalists are not welcome at the Saudi financial ministries and authorities.”

Nadine Hani, who hosts a financial program on the highly rated Al Arabiyah news channel, said her channel tries to pick qualified analysts who could bear the responsibility of their comments. She noted that those analysts are questioned thoroughly about their academic qualifications. She also said the guest speakers for economic and financial programs are usually asked before the program about their own investment portfolio so that the interviewer could avoid asking them questions during the program about the companies in which they hold shares in case the guests are biased. She asserted that this might facilitate the media’s task and mitigate criticism.

Nadine added that the media outlet is not responsible for comments made by the guest analysts, clarifying that her team is qualified enough to question the guest if his answers are unconvincing. She emphasized that there have been no mistakes made in Al Arabiyah’s coverage of the stock market.

Meanwhile, Dr Abdulaziz Al Ghadeer, an economic writer stated that the information given by media, despite its importance and role in forming public opinion, is not up to standard, and played a crucial part in increasing the value of stocks. The media then reinforced the decline of the stock market decline unintentionally because of its poor media coverage. Although limited, there has been communication between the Capital Market Corporation and the media. Al Ghadeer hopes that this communication is strengthened to combat negative media.

Adnan Jaber, an economic journalist at Al Watan newspaper asserted that the media in general was not very inspiring for investors. He admitted that despite the media’s variation and pluralism, it fails to describe accurately the state of the market after the major drop in shares and whether this was a crash or a rectification. He explained that the guest analysts differed because there was no “clear economic” criteria according to which the shares move.

Al Ghadeer returned to the issue of the media’s poor coverage of the stock market. He clarified that this is caused by the absence of specialized journalists adding that the majority of editors and analysts are amateurs. Al Ghadeer clarified that once the media outlets have specialized journalists who are able to interview guests effectively whether s/he is an analyst or official, those who are unqualified or seek fame would not be able to appear in interviews and programs. Adnan Jaber agreed with Al Ghadeer about the lack of specialized journalists, noting that the qualified journalists only make up a minority and that many of them have quit journalism to become more involved in the capital market. He clarified that many of the existing journalists are beginners who are at risk of being exploited by businessmen. Jaber emphasized that the press and other media institutions should start training their journalists immediately on the nature of the market and other economic issues. He cited the training sessions that were held recently by the Chamber of Commerce and the Capital Market Authority; however, this has not been enough. Al Ghadeer illustrated that television and press were more active in their coverage than the radio where coverage of this sort is almost absent. He noted that internet websites on the other hand have attracted many stock market investors.

Al Ghadeer stated that over ten Saudi websites out of 500 worldwide are specialized in following and analyzing the stock market. However, he cautioned against neglecting the supervision of these sites since there are many recommendations that could lead to passing information for speculators. This led the Capital Market Authority to block some websites through King Abdulaziz City for Science and Technology that is responsible for filtering websites. However, Tariq Al Madi, who created the website Tadawul, which differs from the official site affiliated to the Capital Market Authority under the same name and which according to Alexa.com ranks 485 internationally, asserted that exploitation exists everywhere in internet forums, within companies, and in the media. He said that those who visit his website and others should be able to distinguish between sincere and insincere analysts.

Al Madi indicated that the forums reflect the population’s preferences and carry different news about different levels of investment, which are useful for the user. He gave proof to justify this by providing evidence that more than 141,000 people are subscribed to his website with more than 80,000 people visiting and more than one million pages viewed everyday. He asked, “Do all these people lack the ability to distinguish good and bad writers?”

The founder of the Tadawul internet forum, Al Madi, clarified that the respectable sites immediately exclude any member who publishes false or unfounded information as these sites are concerned about credibility. Madi also said that to measure transparency, many internet forums have their members sign their comments using their real names rather than nicknames and that those who are credible are not concerned about using their real names. He added that due to their increasing credibility, media outlets increasingly quote financial websites and forums.

Abdulaziz Al Swaied said that the strength of the forums was not a result of the weakness of media coverage but rather the official silence. He noted that this silence contradicts the campaign entitled “Ignore the rumors.” However, he expressed his optimism for the appearance of Abdul Rahman Al Tuwaijiri, the head of the Capital Market Authority, in the media and his visits to several trading floors. He also praised Tuwaijiri’s mentioning of specific banks that defaulted. He said that when these events took place beforehand, it would not attract media attention. He further expressed his hope that Al Tuwaijiri would inform us whether these banks would be subjected to investigations.