March 17, 2006

IN A SESSION HELD UNDER THE CHAIRMANSHIP OF THE CUSTODIAN OF THE TWO HOLY MOSQUES THE SUPREME ECONOMIC COUNCIL STRESSES ITS FULL SUPPORT TO THE CAPITAL MARKET AUTHORITY. NAIF ARAB UNIVERSITY FOR SECURITY SCIENCES PRESENTS A PAPER AT THE CONFERENCE ON TERRORISM IN MADRID. Custodian of the Two Holy Mosques King Abdullah Ibn Abdul Aziz chaired the session held by the Supreme Economic Council and was devoted to the discussion of the sharp decline of the stock market recently following the sharp rise of the market during the past period. Following the session, the council issued the following statement: Due to the keenness of the state on the interests of the citizens, the Supreme Economic Council devoted a session held at the headquarters of the general secretariat of the council and chaired by Custodian of the Two Holy Mosques King Abdullah Ibn Abdul Aziz to discuss the sharp decline of the stock market recently following the sharp rise of the market during the past period. The council expressed confidence in the strength of the Saudi economy and its ability to grow and flourish. This growth and prosperity of the Saudi economy will be reflected on various economic activities and promise with a good future for investment in it. The council also expressed confidence in the national companies where Investment in them is investment in the future of the homeland and the future of its people. The council expressed confidence that citizens will not follow misleading rumours and information and will instead take their investment decisions on sound bases reflecting their trust in Allah (God) and in the economic future of this homeland. In this context, the council expresses full support for the measures that have been taken and are being taken by the Capital Market Commission to organize the market and protect investors in it especially small capital investors. The Supreme Economic Council will constantly follow up future developments of the market. The Supreme Economic Council (SEC), chaired by Custodian of the Two Holy Mosques King Abdullah, yesterday reviewed the stock market situation and supported the measures taken by the Capital Market Authority (CMA) to protect investors. "The SEC meeting discussed the sharp decline of the stock market index after a sharp rise," the Saudi Press Agency said, adding that the council expressed its confidence in the strength of the economy and its ability to grow further. Expressing its confidence in Saudi companies, the SEC said investment in them would help boost the Kingdom's progress and prosperity. It urged investors not to run after rumors and wrong information. "You have to take investment decisions on a sound basis," the council told Saudis. "The council offers its full support to the measures already taken and those to be taken by the Capital Market Authority to protect investors, especially small investors," the SEC said in a statement. The council also assured investors that it would regularly follow up developments in the market. Earlier, Finance Minister Ibrahim Al-Assaf, said the government would not intervene nor take any action as a result of the recent crash in the stock market. "It is totally baseless that we will intervene, whether by buying or selling. The government does not intervene in decisions taken by investors on the Saudi stock market," the minister said. He also denied reports in some Saudi newspapers that the government would open some public investment portfolios in the social security and retirement sectors in order to reverse the market's fall. Al-Assaf said that what was happening to the stock market was that it was in a correction phase. He told Saudi Arabian Television: "It is in a correction phase at the moment after large unexplainable profits. And as there was a steep increase, there is now a steep decline." He went on to say, however: "Investing, selling, and buying are matters that involve individuals." The minister said the crash in the Saudi stock market did not mean that the Saudi economy was unsteady. Domestic growth remained constant and the Saudi economy was strong. According to official statistics, the Saudi stock market has lost more than SR800 billion in the past three weeks, causing Kingdom-wide panic. Faisal H. Al Sayrafi, president and CEO of Financial Transaction House (FTH), said: "The correction in the stock market will carry on until the TASI reaches 10,000 points. "However, the index will start growing steadily with the performance of the companies until it reaches to the point where it will match the market price with the earning levels." Minister of Finance Ibrahim Al-Assaf met with representatives of the Saudi private sector, as per a directive of Custodian of the Two Holy Mosques King Abdullah Ibn Abdul Aziz. The minister briefed the representatives on the meeting of the Supreme Economic Council (SEC), which focused on the sudden sharp decline of the Saudi stock market. The Council stated that the recent decline is not based on economic indicators, which reflect balanced growth. Al-Assaf said that the SEC discussed various factors affecting the Saudi stock market and ways to help investors benefit from opportunities, especially in companies with sound financial statements. These factors include allowing non-Saudi expatriates to invest directly in the stock market instead of being restricted to mutual funds, as well as cutting the nominal value of shares, which paves the way for share splits. King Abdullah directed that all these ideas be studied and the necessary measures taken, Al-Assaf said. King Abdullah also stressed that investing in the Saudi economy and Saudi companies in an investment in the country's future, and urged the business sector to do so, Al-Assaf added. On the other hand Riyadh-based Naif Arab University for Security Sciences has participated in a conference on terrorism and security organized in Madrid by the center of law and security of the faculty of law at New York University. Naif Arab University was represented at the conference by Dr Abdulaziz al-Fara'edi, member of the academic staff at the faculty of higher studies. The university presented a paper on its efforts and Arab efforts in fighting terrorism, which was distributed in both English and Arabic languages. The conference, attended by representatives of 27 countries, reviewed a number of topics including judicial and police cooperation for fighting terrorism, and means for drying financial sources of terrorism. It was decided at the conference to convene a similar conference at New York University on June 23-25, 2006. The international conference on terrorism opened in Madrid, kicking off four days of discussions that were culminated with commemorations marking the first anniversary of the March 11, 2004 train bombings in the capital blamed on Al-Qaeda. Spain's Prince Felipe inaugurated the conference by saying it underscored the international community's condemnation of terrorism. "It allows us at the same time to pay an emotional homage and show recognition and respect to all victims of terrorism," the prince said, adding that Spain and the world would never forget "the profound grief of those hours" following the March 11 attacks. "Terrorism is a threat to life, it disavows fundamental rights, denies liberty and attacks the legality of the state. It is thus the enemy of democracy. Its eradication is a priority," said Felipe, calling for increased cooperation to that end.