Saudi Market Meltdown:

On Saturday Nov. 11, the Saudi stock market continued its decline, and lost about Riyal 6 billion in market value. The market index lost about 5% for the day, to close barely above 8000, the lowest level of almost two years. At some point the index briefly broke through that psychological level. The President of the Saudi Market Authority (the equivalent of the SEC and the NYSE combined) claimed the decline was unjustified and did not reflect the ‘strength of the Saudi economy’. Dr. al-Tuweijri was appointed early this year after the sack of his predecessor because the market was ‘inexplicably’ declining. He contended in an interview that the Saudi market is ‘oversold’, a very risky thing for an overseer to say about the market. Traders grasped at his statement and invited the government to put its money where its mouth is and start purchasing these cheap ‘oversold’ Saudi shares.

Other analysts claimed that the behavior of the market is a a catastrophic mystery, and an enigma, but they did not say what it is wrapped in. Some have said that the market is ‘out of control’, and beyond the influence of the Authority or the Ministry of Finance. A leading economist claims that the market requires intervention by a ‘higher authority’: he meant only the King, not divine intervention. Perhaps the latter would be more effective in the long term. Traders and ‘investors’ seem frustrated that the Saudi market has lost 60% of its value even as the overall economy, led by the petroleum sector, has been growing (in nominal terms). Now all eyes are looking at the ‘Palace’ to do something- the problem is that a palace, even the omnipotent Saudi ‘Palace’, can artificially lift the market only temporarily through politically ‘inspired’ measures. This was done earlier this year in Saudi Arabia, on order of the King, but its positive effects did not last.

In Kuwait, the market followed the Saudi lead and declined sharply. Traders attributed the decline to profit taking and the effects of the Saudi market decline. The Kuwait market has also been plagued with serious issues of lack of transparency and questionable financial disclosure by listed companies.

At the end of the day, all GCC markets declined, but none nearly as deeply as the Saudi market.

Iraq:

ALfayhaa TV, Iraqi owned and operated but stationed in Dubai, reports that U.S military leaders are re-assessing their strategy in Iraq. Meanwhile Iraqi President Jalal Talibani said that the Democrats, victorious in recent congressional elections, will not push for an early withdrawal of American troops from Iraq.

Leader of Al-Qaeda in Iraq, Abu Hamza al-Muhajjir (his last name, meaning immigrant, indicates that he is supposed to be from outside Iraq), has issued a comment on the U.S elections. Clearly he watches the American media, for he used the term ‘lame duck’ in his statement. He accused President Bush (he called him the fool) of spreading the influnce of the Persian Magian (Magii) Empire over Iraq. In this, Al-Muhajjir used the same term favored by the Ba'athists for years in referring to the ruling Mullahs in Iran- but Baghdad Bob was last reported in exile somewhere in the UAE or Jordan.

He also urged true believers to be patient, and promised that the Jihad will not end until they ‘reach the olive trees of Rome’, presumably a reference to his warriors tethering their horses and camels to Roman olive trees, and that would be after they blow up the ‘filthy house they call the White House’. He did not, however, go so far as to promise free Chianti to every true believer who rides his camel down the Spanish Steps. He did announce that the first stage of the Jihad has just ended and that they have started a new stage whereby they have put down the ‘first brick in building the Islamic Caliphate’. The plot thickens.

Lebanon:

The political crisis started last summer with the Hezbullah-Israel war has deepened suddenly. Hezbullah and Amal movements, the major Shi’a political organizations in Lebanon, have announced the withdrawal of their five ministers from the Lebanese government. This should doom the current cabinet of Mr. Siniora, whom the Shi’as want replaced with a government of ‘national unity’. Prime Minister Siniora has refused to ‘accept the resignations’, whatever that means.

Cheers
Mohammed