The liquidity and values of shares trading on the Saudi Stock Market has increased over SR10 billion recently. The rise is being attributed to an increasing trust in the Saudi economy, a thriving real estate market plus other economic and technical factors. Economics experts say the most important factors are the trust of market dealers due to the new regulations that are in line with global economic circumstances. Moreover, a recent Saudi Arabian Monetary Agency (SAMA) and Saudi Stock Market cooperation memorandum to supervise, govern and settle securities is helping to stabilize and develop the market. One dealer attributed “the increase to the entry of new liquidity generated by the real estate market as many projects are delayed due to rising cement prices and lack of labor due to a rumor that real estate prices will decrease in the near future.” The liquidity of the market has increased from SR8 billion to SR10 billion, which is the highest rate since the second quarter of 2009. This liquidity will cause shareholders to speculate and inflate share prices. Some analysts believe that the current liquidity in the market is a good sign but doubt that the prices will continue to rise. However, one analyst said that “there is a huge liquidity in the markets and perhaps speculation is the goal investors are after”. __
