Saudi shares plummet again on retail sell-off

Riyadh: Saudi shares fell by nearly the 5 per cent limit yesterday as jittery retail investors poured in more selling orders that found few buyers.

The all-share index of the Arab world's largest bourse fell by as much as 4.91 per cent in intraday trade before closing the morning session at 17,630.87 points, down 4.63 per cent from Thursday's close.

Turnover was around 4.54 billion riyals ($1.2 billion), far below average volumes this year.

All the 78 listed stocks closed in the red, with most trade focusing on blue chips such as Sabic, Saudi Telecom, Albilad Bank and Savola Group.

"Small retail investors are panicking and are driving down a market which is in desperate need of direction or intervention by funds to limit the losses," a senior trader said.

The index started falling last week, shedding more than 10 per cent, in what analysts called a long-due correction.

The index gained more than 630 per cent since late-2002 on the back of record oil receipts.

Financial consultant Walid bin Ghaith said the fall has become exaggerated.

"Only small retail investors are moving the market now," he said.

About three million Saudis trade regularly in shares and a majority of them lack basic knowledge in market fundamentals and mechanisms.

"The market makers need to find renewed interest in buying, this should help the market, especially if they focus on blue chips," bin Ghaith added.