Trading volumes on the Saudi bourse hit
a record of 17.4 billion dollars in 2000, a year when the correlation
between oil prices and market performance weakened. Bakheet financial
The Riyadh-based investment
specialists said the NCFEI index rose 11.3 percent over the year, but
"this increase was less than expected given the usual high
correlation between the Saudi stock market and oil prices.
In August, the NCFEI climbed to
2,392.8 points, another record in the 15-year history of the index,
but it took a U turn in the final quarter under the negative influence
of the Israeli-Palestinian conflict.
BFA said 2001 performance would
depend on "the speed of implementing previously announced
economic and financial reforms, the start of the privatization
process" and diversification from oil as the key driving force of
the Saudi economy.
The NCFEI is the most capitalized in
the Arab world, at more than 60 billion dollars, but it operates only
on an interbank market system.
Finance Minister Ibrahim Al-Assaf
called last week for the rapid creation of a formal stock market to
improve transparency and boost private sector investment.
But a formal bourse "will not
necessarily lead to a halt to Saudi capital flowing abroad, as the
kingdom has long been an exporter of its economy to absorb them and
its openness to the world." Financial analysts in the Gulf state
estimate that a staggering 600 billion dollars in Saudi funds are
Source: Beirut Times
Related story in
AS A RESULT OF THE INCREASE IN ECONOMIC ACTIVITY AND THE IMPROVEMENT
IN INVESTMENT ENVIRONMENT, THE STOCK MARKET CONTINUED TO IMPROVE
DURING 2000. THE NCFEI SHARE INDEX STOOD AT (2,286) AS OF DECEMBER
14,2000 COMPARED TO (2,028) AT THE BEGINNING OF THE YEAR INCREASING BY
13 PER CENT.