King Abdulla of Saudi Arabia announced the construction of 500,000 houses at a cost of 250 billion riyals ($66.7 billion) and raised the value of mortgages provided to nationals to 500,000 riyals from 300,000 riyals on March 18. This was part of the effort to prevent protests from escalating.The new package comes after $36 billion in spending was announced Feb. 23. Saudi companies listed on the Tadawul, including Saudi Basic Industries Corp. (SABIC), will pay their staff two months pay in bonus in line with a royal decree covering Saudi civil servants.
The package had positive effects on the Gulf shares. Sabic, the world’s biggest petrochemical maker, rallied 4.6 percent. Emaar Properties PJSC, builder of the world’s tallest skyscraper, advanced to the highest in almost a month. Saudi’s Tadawul All Share Index (SASEIDX) rose 4.5 percent to 6,343.79 at the 3:30 p.m. close in Riyadh, the highest since Feb. 19. The market was closed yesterday for a holiday.
On the other hand, demonstrators across the Middle East, including Yemen, Libya, Bahrain and Syria are still demanding civil rights, higher living standards and the removal of entrenched regimes. Egypt's stock exchange was still closed, but was said to possibly be opened "within days", said Prime Minister Essam Sharaf in an interview yesterday. Comparing to other countries in the region, Saudi Arabia seemed to be doing pretty well.
3 comments:
Many news analysts are saying that Saudi Arabia's King might only stay in power because Saudi Arabia has the oil money to pacify it's people....
Given the current situation of Lybia and how the situation in Midwest is gradually going out of control, I would see it will affect the Gulf shares. When one can argue that the high oil price can give the King the ability pacify it's people, it is obvious to see that the situation is only temporary. Thus, the rise of gulf shares will not rise any further in the couple of weeks and will probably fall when everything is stable again.
Saudi Arabia is an economy where inequality is very high even though much of it is disguised in calculated statistics.
The established monarchy earns high oil revenue and is also the beneficiary of religious tourism.
Mass revolt and civil disobedience is still a looming possibility.
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