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Literature Review Saudi Stock Market - Research Paper Example
Pages 5 (1255 words)
Performance of Saudi Stock Market University Introduction The Saudi stock market has evolved extensively since it was first inaugurated in 1984. The structural changes and regulatory changes in the market have brought in more investment in the market…
With the Saudi stock market having a market capitalization of $ 313 billion in 2009, it is the largest stock market in the Arab market (Samba Financial Group, 2009). The Saudi capital market is dominated by retail traders who contribute about 87.5% of the total traded volume in 2008 (Samba Financial Group, 2009). Within this research work, the researcher will conduct an extensive review of existing work on the performance of Saudi stock exchange comparing and contrasting its performance to other key stock markets in Europe and America and evaluating the role the stock market plays in the Saudi market. Literature Review: Performance of Saudi Stock Market According to Alshogeathri (2011), the Saudi stock market has experienced six major market collapses since it was formalized in 1984. During these collapses several million worth of investments was lost by the investors and the substantial debts accrued by the investors (Alshogeathri, 2011). This in return has turned major investment funds and mutual funds out of the market due to volatility. This is the main reason why the Saudi stock market continues to be dominated by individual, and mostly retail, investors. In comparison to other developing markets, Saudi Arabia’s stock market is grown in tandem with those economies. In particular with the Gulf Cooperation Countries (GCC), the Saudi market has enjoyed more liberalized trading environment after the restructuring of the bourse in 2005. ...
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