Tuesday 6 May 2014

Saudi Arabia tries to cool stock market with treasury notes | The National

Saudi Arabia tries to cool stock market with treasury notes | The National:



"Bank holdings of treasury bills in Saudi Arabia rose to a record high in March, indicating the government may be responding to concerns about overheating in the stock market by selling more notes.



Total treasury holdings by banks rose to 209 billion Saudi riyals (Dh204.68bn), up 14.8bn riyals on the month before, according to data from Jadwa Investment, the investment bank based in the kingdom.



“We suspect that the government may be concerned that excess liquidity in the stock market could create the risk of a bubble similar to 2006,” said Fahad Alturki, the head of research at Jadwa. “The higher holdings suggest the Saudi Arabian Monetary Agency could be trying to manage liquidity in the banking system.”"



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