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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (55996)	3/15/2006 4:28:08 PM
From: shades	Respond to of 110194

If you ask me they should never have been given control of it in the first place but such is the fear of another Great Depression. Even while it is widely accepted that the Fed caused the first one the powers that be want them to save us from the next one. Kessler says millions of traders all over the globe can make more efficient market decisions than the few guys at the fed, my political science professor said beneficial dictator was the best form of gubbment: tradearabia.com Prince vows $2.7bn investment amid market crash Posted: Wednesday, March 15, 2006 Riyadh Saudi Arabia’s Prince Alwaleed bin Talal said his firm, Kingdom Holding, will invest SR5-SR10 billion ($1.3-2.7 billion) in the Saudi bourse after the current correction he blamed on speculators. His pledge came as analysts said a strong correction that had hit the Saudi stock market and others in Gulf states would continue for several weeks. 'It (Kingdom) will allocate 5 or 10 billion to enter the market,' the prince told Al Arabiya television. 'There are now special and great opportunities,' he added. Reports, meanwhile, said the value of Gulf bourses dropped today to around $900 billion down some $200 billion from their 2005 value and more than $300 billion below the peak. Prince Alwaleed said Saudi economy was strong and that speculators caused the stock market's 'plight' by driving weak shares up to unjustified levels. 'What happened a few months ago on the Saudi market is that speculators dominated the market and created a bubble,' he was quoted as saying in a Reuters report. A two-week long correction has trimmed the capitalisation of the bourse by more than 31 per cent. Saudi shares rebounded more than four per cent after Alwaleed's comments and an announcement by the Finance Ministry that Saudi Arabia was mulling allowing foreign residents to invest directly on the local bourse and lowering the nominal value of shares. Alwaleed welcomed the proposals by King Abdullah. 'Splitting shares is beneficial and allowing foreign residents (to invest) is a very good decision,' he said. The prince warned against speculation for short-term gain. 'The profit factor now is very strong ... There are many solid and respectable Saudi firms which derive their strength from that of the Saudi economy,' he said. 'The stock market in any country is a reflection of the economy. The Saudi economy is very strong and this gives reassurances and encourages the Saudi investor to return (to the market), buy and participate in companies that are respectable and have a (good) history.' The prince also urged the Capital Markets Authority to expedite the listing of firms to absorb excess liquidity. 'There is a lot of liquidity in Saudi Arabia but not many investment opportunities.' Panic among the majority of small Saudi investors pushed many of them to sell their stocks, which greatly contributed to the slide. 'The correction was severe because it came late. The Saudi market had been highly inflated, especially last month when it shot up by 20 per cent,' said Ali Taqi, senior manager of Investment Services at National Bank of Kuwait. 'I think the index will lose 30 per cent-35 per cent more to around 10,000 points before it rebounds. At that level, the value will be attractive for investors to start buying, pushing the index up,' Taqi said in an AFP report. Saudi economist Abdulwahab Abu-Dahesh believes the 'current crash' in the market is a normal reaction to overvalued prices. 'The current crash taking place now is a reaction to the skyrocketing rise in stock prices. They became highly overvalued. Most investors, who are speculators, have been affected by rumours,' Abu-Dahesh said. But he predicted that the Saudi market will gradually regain confidence and resume climbing within the next two months. All the markets in the Gulf, which have been on a downward slide for the past few weeks, closed lower Wednesday. The Abu Dhabi Securities Market dropped below the 4,000-point mark to close at 3,986.96 points, down 0.85 per cent yesterday’s close. It has so far lost 23.4 per cent on the end-2005 close of 5,202.95 points and 37.7 per cent on its all-time high. The Dubai Financial Market Index closed at 599.88 points, down two per cent, after rising in early trading. It is now 41.2 per cent below its end-2005 close of 1,019.69 points. The Kuwait Stock Market dropped 1.1 per cent to close below the 10,000-point mark at 9,939.30 points, 13.2 per cent below its 2005 close of 11,445.10 points. The Doha Securities Market dropped below the 9,000-points mark to close down 4.4 per cent at 8,873.08 points. It is 19.7 per cent below last year's close of 11,053.24 points. 'The UAE markets have doubled their gains in 2004 and 2005. They started the correction in November, but are expected to remain volatile for some time,' Taqi said. The Gulf markets have been sliding despite highly positive economic indicators of increased public spending and record high revenues due to strong oil prices.Reuters