A futile attempt to weaken the Saudi stock market

A futile attempt to weaken the Saudi stock market

Rashid Al-Fowzan

By Rashid Al-Fowzan Al-Riyadh   PEOPLE who are active in social media know that it has both positive and negative effects. If a person uses this media intelligently with a positive outlook he can reap lots of benefits and gather much information to enhance his knowledge. At the same time we can see some people using new media for negative purposes. They focus on negative news and try to circulate them in order to gain publicity and fame. Terrorist and extremist groups use new media to attack the Kingdom. Some people spread wrong information to damage the Kingdom’s economy. A few days ago there was a fake report that went viral on social media, which said major investors have relinquished their stakes in a Saudi company. Social media activists exchanged this damaging news through WhatsApp and Twitter. Some innocent people forwarded this news to their friends and followers believing it to be true. After reading this news some people contacted me through Twitter and Snapchat to verify its authenticity. I immediately contacted the source of the news and they were unable to confirm it. People have been exchanging such reports through social media without confirming their authenticity. I studied the Kingdom’s stock market situation just before the publication of the report on the change in company ownership and found there was no fundamental change in the market. Stock exchanges functioned normally, reflecting the market’s financial strength and vibrancy. I asked Prince Sultan Bin Mohammed, a big stakeholder in Almarai dairy company, about the stock market developments. He said he had sold 5 percent of his shares in the company to the Public Investment Fund. He was not selling off the company to leave the market as indicated by the report. The prince told me that he would continue with Almarai and he expected greater progress for the dairy giant. He also spoke about many other positive aspects. Statistics published by Al-Riyadh daily showed that there were no abnormal developments in the Saudi market in 2016. Those who exchanged the false news did not notice that the report had not mentioned how many shares were sold on a specific date. If the chief executive officer says he sold 90 percent of his stakes in a company, he may be telling the truth. But in order to gauge the impact of his action, we should know how many shares he had held in that particular company. If he had 100,000 shares in the company and sold 90,000 of them, it means he has sold 90 percent of his shares in the company. But that number could be nothing compared to the total value of the company. The Capital Market Authority publishes news about change of CEOs to ensure corporate transparency. The change of CEOs on the other hand will create public confidence in a company, as people need not worry about its future. The publication and circulation of such false news on social media indicate that there are some people and agencies who wanted to create fear about the Kingdom’s stock market, which is the largest in the Middle East and which comes next only to real estate in terms of the volume of investment. We have been able to expose the false news aimed at undermining the Kingdom’s economy and weakening its financial market, rendering that attempt a complete failure. However, we should know that there would be ups and downs in the stock market in response to local and international economic and financial developments, which is quite normal.