Big Mummy Show

Sabria S. Jawhar
The Saudi Gazette

Monday, 24 April 2006
Small kids, oh sorry, I mean small investors in the Saudi stock market were relieved following the appearance of ‘Big Mummy.’
Finally the head of the Capital Market Authority (CMA), Jamaz Al-Suhaimi, finds time to be on the "the much-watched Saudi TV Channel One," at a time when people started to believe that Big Mummy was nothing more than an imaginary character created to scare away ‘bad guys’ or those daring enough to mess with the market.
But, the CMA chief failed to address the fears and concerns of almost five million investors, most of who got into the market after taking out bank loans or by selling their homes and cars.
Big Mummy tried to calm the angry children by telling them how everything is fine and he is at home punishing the bad guys for misbehaving. So far, Big Mummy has taken almost SR180 million from those manipulators without mentioning their names or where did that money go. Saudi law allows authorities to declare the names of the fraudulent people. No problem, kids usually don't care about the details as long as bad guys are punished.
Big Mummy said that the CMA has nothing to do with the crash in the market and that they have no intention to interfere in the market's behavior. Yet Big Mummy said the crash in the market was a result of structural disorder!
Who is structuring what? Mummy we are confused.
An economic analyst, who happens to be a friend of mine, told me that responsibility, accountability, fairness and transparency are the pillars of truly universal standards that should serve as "aspirational" benchmarks for all economies.
He said every market has its own rules. Markets thrive or wither, in part, on the strength or weaknesses of these pillars. But he failed to explain to me the reasons behind the crash in the biggest Arab market at a time, when government revenues are surging, which has to be good for local business!
The invisible man policy that has emerged recently in the Saudi stock market is still a puzzle that Big Mummy has not solved yet for the people. Every day share prices fall, those who choose to buy shares at throw-away prices collect them and raise the index at the last moment. That is natural. But the problem is that they do not keep the shares, but sell them the next day pushing the market in further decline.
Bankers have never been worried about the ups and downs of the stock market, because they are confident that they will finally reap an attractive return on their investment.
My friend, the economic analyst, told me that a fool only stays confident as long as he finds a bigger fool to sell to at a profit.
Following the end of the Big Mummy show, several questions are left not answered:
Is investor confidence in the market and the CMA evaporating? Why is the CMA so quiet about the practices of the banks that come at the expense of customers? Is the CMA qualified enough to run such a huge market? Is the CMA really protecting the small investors or the big ones? Who is the loser in this so called war between the CMA and the speculators or big players? Questions that the coming days will certainly answer.
The fact remains that the market faces major policy threats from the CMA’s lax attitude, issue of unstudied regulations, which are somehow leaked to certain people and in turn affect small investors, who the CMA should be protecting.
The grinder is moving and the whole nation's income has become a doll in children's hands. Well, when elephants fight, it is the grass that suffers.