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Saudi Arabia: Sacking of CMA chief fails to revive Saudi market

Hiring and firing securities markets regulators on the basis of stock index performance is not a particularly credible policy. But that’s what the Saudi authorities did last month, sacking the chairman of the Capital Markets Authority, Jammaz Al-Suhaimi, a modernizer and reformer unfairly demonized on stock speculators’ bulletin boards across the kingdom as somehow being responsible for the crash of an overvalued market.

ex chairman of the Capital Markets Authority, Jammaz Al-Suhaimi Jammaz Al-Suhaimi: unceremoniously replaced

The lessons of Jammaz Al-Suhaimi's demise

Al-Suhaimi had struggled to dampen down ill-informed retail buying of speculative stocks at unjustifiably high valuations when the Tadawul All Share Index rose uncontrollably to 20,643.6 this February. When the inevitable market correction turned into a rout in March, he tendered his resignation. This was rejected. Al-Suhaimi was told he was doing good work for the benefit of his country and should carry on.

Seven weeks later he was out: replaced, unceremoniously, by Abdul Rahman bin Abdul Aziz Al-Tuwaijeri, secretary general of the supreme economic council. “It was a total shock,” says a former colleague of Al-Suhaimi, “completely unexpected.”

What had changed?

Simply a scapegoat?

There are two schools of thought. One holds that the authorities simply needed a scapegoat for the failure of measures brought forward in March and April by the supreme economic council – permitting resident non-Saudis to invest, splitting shares to make them look nominally cheaper, talking up future privatizations of good-quality companies – to halt the market’s slide.

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