The Saudi market continued its freefall Saturday, with the Index declining to the 7307 level. Investors seem shell-shocked. Most local analysts seemed baffled that the market has been declining for some time, even though they perceive the Saudi economy as being strong (at least in terms of the oil sector and its revenues). Some have called for encouraging investors from other Gulf GCC countries as a way to shore up demand. This is not likely to be the hoped for panacea for the Saudi market. Big Gulf investors usually seek to diversify their risks by going to international markets, since regional markets are similar and exposed to the same risks associated with the oil markets and public revenues, especially now that the exchange rates are more closely coordinated. They are also exposed to the same security risks: they all face a resurgent angry Iran, and a chaotic angry Iraq. They also host a worried, deployed and awesome American presence, perhaps the only safeguard in a region that is running amok.

A Saudi financial columnist wrote in the daily Al-Riyadh that the trading day is too long (4 ½ hours compared with the NYSE’s 6 ½ hours of regular trading and the extra-curricular electronic trading) and may be one cause of the recent market decline. He argues that the long trading session keeps shares from closing at the high levels they reach during the day. I guess he means that it gives investors a chance to have second thoughts and perhaps experience what is called “buyers’ remorse” in the United States. What would they do if they ever have after-hours and pre-hours electronic trading? Perhaps they can make the market schedule flexible: stop trading and shut down the market for the day as soon as the shares index move up a certain number of points.....

Meanwhile, the Kuwaiti market has been performing quite differently, and the Index reached its highest level in a year (10,634.9) on Saturday.  The value of trading reached a historic level at the end of last week, and market authorities were incredulous enough to start an investigation. Was it a case of too much of a good thing? On Va Voir.

Iraqi Kurdistan has been advertising aggressively for investments in Arab media, including electronic media. They call it “Kurdistan, You Gateway to Iraq”. So, leaving politics aside, the Kurds may have at least one good reason to remain within Iraq. The dismal way things are in most Arab countries and Iran, Kurdistan may be able to provide the only reliable safe haven for investments and tourism. Neither the Jihadist fuzzywuzzies nor the Ba’athists have been able to infiltrate the Kurdish region. The one potential sources of future trouble is the ultra-nationalistic Turkish military, and their Kurdish guerilla tormentors.

Arab governments sent condolences to the regimes in Algeria and Morocco for the deaths caused by Islamic terror bombings (less than 30 died). AlFayhaa Television bitterly noted that none of these governments expressed sorrow or sent condolences to the Iraqis for the terror bombings that killed over 500 in only one week. Alfayhaa wondered if that was because almost all the victims were Iraqi Shi’as.
Cheers
Mohammed