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.
|Jammaz Al-Suhaimi: unceremoniously replaced
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.
The second theory is more sinister.