Wednesday 2 March 2011

FT Tilt - Saudi tumbles in broad Mideast freakout

The market capitalisation of Saudi Arabia's Tadawul All Share Index declined by almost $50bn in February as Gulf markets - dominated by local retail investors - enter a hectic selling spree.

Foreigners are forbidden from owning shares on the Saudi exchange, which is the largest and most liquid in the Middle East. Outside investors can get exposure to the market through swap agreements with local Saudi middle-men, but have yet to buy into the market in a big way.

On Tuesday, the Saudi market fell by almost 7 per cent to a 10-month low. Those declines came just one day after the Dubai exchange hit a seven-year low.

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