AL-EQTISADIAH NEWSPAPER
Emerging Arab Equities Markets
The crash of the Saudi stock market in many respects has been different than the most recent crash affecting US investors. From September 2000 to January 2, 2001 the NASDAQ, heavily populated by technology stocks, dropped 45.9%. In October 2002, the NASDAQ dropped to a 78.4% decline from its all-time high. Some of the factors driving the crash were similar to afflictions of the Saudi stock market. The most important was ignoring the fundamentals and overvaluing stocks.
Regional Arab investors can be satisfied that the uglier, corruption related factors of cooked financial accounts, inflated earnings through crooked accounting, and conflict of interest between research firm analysts and investment bankers touting initial public offerings that led to the US crash were not major factors in the Saudi Market. Full Analysis in Arabic (PDF)