Saudi king orders crackdown on improper stock trading

King Abdullah has ordered a crackdown on manipulation of Saudi Arabia’s booming stock market, insisting action should be taken against improper trading by members of the royal family if necessary.

In an unusual message to the chairman of the country’s Capital Market Authority, the king said trading rules should be applied to everyone, including royals. The country’s extended royal family has thousands of members.

“With the current return of investors to the stock market, there has been a return of some violations that require investigation and accountability, requiring violators’ cases to be looked at by the specialised legal authority,” the Alsharq newspaper quoted the king as telling the CMA’s Abdulrahman al-Tuwaijri.

The king was also quoted as saying some of the violations were being committed by members of the royal family, who had continued their actions despite warnings, putting them in a position to be investigated and even taken to court.

Saudi Arabia is a monarchy with no elected parliament, and the most senior positions are occupied by high-ranking royals, some of whom also have extensive business interests.

The country’s stock market has soared this year and trading turnover has increased hugely because of strong economic growth on the back of high oil prices, hopes that authorities will open the market to direct foreign investment, and an influx of speculative money.

The market, the largest bourse in the Arab world, crashed in 2006, hurting tens of thousands of Saudis. Many blamed the government for not protecting them from the clout of big investors.