Performance of Saudi Stock Market - Research Paper Example

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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. Most legal restrictions that had been imposed on the bourse were lifted, paving the way for a more integrated market (Marashdeh & Shrestha, 2010). Though Saudi Arabia’s stock market controls approximately 35%-40% of the total traded volumes in the GCC, its market continues to face challenges that require it to have a more integrated approach to its neighbors.Marashdeh and Shrestha (2010) argue that the liberalization of the economies in the GCC markets has contributed to the increasing number of foreign investors in the GCC stock markets. Saudi Arabia’s market has benefited from this new wave. The number of foreign corporate investors in the market is increasing, though still the market is largely dominated by retail traders ...
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Summary

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…
Author : vkiehn
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