Stock Crash Hits Saudis.

Reuters reported on May 3 that mass share-ownership had ended in tears for many ordinary Saudis, adding: "Hundreds of thousands got their fingers burned in a stock market crash since February that has sheared some 40% from the value of the Arab world's largest bourse. Over the past three years up to 9 million Saudis, or half the population, joined in the new national pastime of playing the market in a conservative desert state whose strict [Wahhabi] brand of [Sunni] Islam outlaws standard forms of gambling. They were encouraged by a government who hoped the bourse would enable citizens to share in the economic boom that has come with a rise in world oil prices not seen since the 1970s and iron out some of the country's huge disparities of wealth. Now they are hesitant to return to the market and - in an ironic twist - say Saudi Arabia's ultra-rich have abused an initiative aimed at helping the less well-off.

Reuters quoted a photographer called Abdullah "who lost 400,000 riyals ($107,000) since investing five months ago", as saying: "The psychology has changed. Now no one is interested in the market, no one is going to put their money back there so easily". Reuters added: "Hoping to buy himself a fancy villa, Abdullah borrowed money from a bank and then added some of his wife's savings to his own, before placing 500,000 riyals in last year's boom market. He told Reuters: "The market regulator is to blame. It should not have allowed the market to go up so far and to let these people manipulate it at will. Ordinary folks like me lost, and what fault is it of ours?".

The government and its Capital Markets Authority (CMA) have blamed the crash on wealthy, sophisticated speculators who drove prices to record levels over the past year, then pulled out of the market en masse when the CMA tried to impose order. Reuters added: "Before, the media raved about teachers and pupils skipping class to track their stock options and mind their portfolios. Now, they relate tales of bankruptcy, reclaimed houses and heart attacks in trading rooms". It quoted sociologist Azza al-Mehdar as saying: "It has been incredibly negative. Marital relations have been hurt, people have neglected their jobs. I know many who gave up working just so they could give all their time to playing the bourse".

Reuters added: "In an authoritarian state with no tolerance of public protest or room for political expression, thousands of Saudis have turned to Internet chatrooms to vent their anger". It quoted columnist Khaled al-Majed as having said on a website: "What started as a correction ended as a major theft of defenseless people by a mafia committing cold-hearted robbery. The stock market is creating a rupture in society that will not be easily fixed. We are a people heading for poverty. What do we imagine our situation will be when this boom is over?"

Though there has been no danger to the country's wider economic health, the government had to be seen acting to counter the deep sense of injustice. King Abdullah, whose media persona is of a modernising father figure, issued a decree on April 30 cutting domestic fuel prices by about 30%. The CMA has vowed to "oust" speculators and revolutionise the market information flow.

The government says its project to involve as many as possible in ownership of national firms is still on track. Reuters quoted Abdullah Shamasi, editor of the local economic magazine al-Eqtisadiah, as saying: "It's still alive and the state is still encouraging citizens into the market. Even the 'professional investors' lost millions of riyals. We can't say that the speculators gained and the small guy lost. Everyone lost".

Reuters quoted a prominent Wahhabi religious scholar, Shaikh Ayedh al-Gurni, as saying at a lecture that some Saudis were paying the price for having let greed eclipse their devotion to God. "It's shameful that some good Muslims became so preoccupied with commerce and shares that they missed daily prayers and would only open the Qur'an once a week on a Friday". Yet Gurni was careful to give his blessing to entering the exchange, saying: "Show me the way to market!", citing a verse by a companion of the Prophet Muhammad.