What are Saudi investors thinking? In a week in which the Saudi Government declared the slide into war in Iraq 'inevitable', they all piled into shares, sending the TASI index up 3.4% to 2,685.13 points.
Traders said this bounce in share prices followed the February 14 United Nations debate and anti-war protests. Yet investors are not stupid and they must surely also be listening to what their own government is saying.
So why would Saudi investors welcome an attack on Iraq? Do they think that far from de-stabilizing the region, war might actually improve business prospects in the region?
It is sometime said that you should follow what people do with their money rather than listen to what they say. In that case Saudi investors seem to have their hearts on one side of the argument while risking their wallets on the reverse outcome.
The truth is that a short-war in Iraq will remove uncertainty and send share prices higher. It is also likely to promote rapid adoption of economic and social reforms in the kingdom, such as the $20 billion Saudi Gas Initiative.
Indeed, a post-war stock market is likely to boom and to that extent last week's rise in share values just represents a few investors jumping the gun, literally in this case.
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Saudi shares jump by 3.4%
- Saturday, February 22 - 2003 at 10:15
Some Saudi investors are jumping the gun and putting their money on a favourable post-war business scenario. Why else would the stock market go up at this moment?
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Peter J. CooperSaturday, February 22 - 2003 at 10:15 UAE local time (GMT+4)
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