JEDDAH: The Saudi Capital Market Authority (CMA), the stock market regulator, has imposed sanctions on five people for insider trading and stock price manipulation in a fresh bid to boost investor confidence and improve market transparency.
The CMA also fined one listed firm for violating disclosure rules, according to a statement issued late on Tuesday on its website.
The sanctions against the five individuals were delivered by the Committee for the Settlement of Securities Disputes.
Turki bin Satm Al-Naseeri, one of the five individuals, was fined SR450,000, ordered to reimburse another SR2.7 million and banned from trading on and working for all listed firms for one year.
Three others -- Mueedh bin Radad Al-Zahrani, Radad bin Saeed Al-Zahrani and Abdul Rahman bin Saleh Al-Hadheef -- were also banned from trading on and working for all listed firms for one year and fined a combined SR250,000.
Amal bint Abdul Rahman Al-Manie was ordered to return about SR241,000.
Industrial group National Industrialization Co. (Tasnee) was fined SR50,000 for not disclosing the resignation of a senior finance and investment executive, CMA added.
"The action is the enforcement of transparency by the CMA. It will definitely help boost investor confidence in the market," said Faisal H. Alsayrafi, managing director & CEO of the Jeddah-based Financial Transaction House (FTH). "We encourage tougher rules in order to avoid stock manipulation and insider trading in the future," he added.
Alsayrafi said the CMA's strict vigilance would help detect shady transactions and deter manipulators in the market.
Echoing Alsayrafi's remarks, John Sfakianakis, general manager and chief economist at Banque Saudi Fransi, said: "The CMA's intentions are to make the Saudi stock market more transparent for all investors. There has to be a level-plain field for all participants in the stock market, be it local or foreign."
He added: "The CMA is showing acute commitment to push ahead and become zero tolerant on insider trading and lack of corporate transparency on listed companies. What is even more telling is that a securities court is now involved which is providing important legal underpinnings."
The CMA has also revoked the licenses of a dozen brokerage firms for violating market laws and regulations.
The CMA Board of Commissioners on Sunday canceled the authorization of Addax Securities Saudi Arabia based on its request. Addax Securities Saudi Arabia has requested CMA to cancel the authorization which was issued by the board of commissioners on March 31, 2008, to conduct securities business of dealing as principal, agent and underwriter to manage, arrange, advise and hold custody.
The CMA also canceled the authorization of Saudi Pioneers Securities Company on Sunday based on its request. The authorization was given to Saudi Pioneers on Dec. 2, 2006.
The Saudi stock market failed to react positively to CMA's move on Wednesday, the bourse's final trading day of 2009.
The Tadawul All-Share Index (TAS) ended flat at 6,121.76 points. Sector gains for the day ranged from 0.04 percent by Agriculture & Food Industries to 0.39 percent by Energy and Utilities, whereas sector losses ranged from 0.14 percent by Cement and Hotel & Tourism to 1.00 percent by Media & Publishing. Market breadth was negative with 41 advancers against 72 decliners giving an AD ratio of 0.56, the FTH said in its daily market commentary.
The stock market turnover was slightly over SR2 billion on Wednesday.
Shares in Saudi Basic Industries Corp. (SABIC) increased 0.6 percent after it announced plans on Tuesday for its first private bond placement to raise SR10 billion to boost its finances and fund expansion.
In the Banks & Financial Services sector, shares for Saudi Hollandi Bank, Banque Saudi Fransi, Bank Albilad and Bank AlJazira declined on Wednesday.
By Khalil Hanware
© Arab News 2009
