The study of Saudi Arabia financial market is of importance as the country has become a key player in the political, regional and economical scenario. Various literatures have reviewed the financial markets of the developed world; yet, the financial markets of the Middle East have been largely ignored due to various reasons. The role of Saudi Arabia financial market is vital because firstly, the country faces economic challenges in terms of its growth and development. It is recognised that the country faces ‘the real challenge [in the development of] the financial infrastructure to bring back some of the massive Saudi wealth held abroad and to help create vital employment opportunities for its burgeoning population’ (Timewell 2002). The economic growth of Saudi Arabia will have impacts on the rest of the world.
Secondly, ‘market strategies have theorized that the Saudi crash [stock market crash of 2004] put pressures on the US markets’ (Saudinf 2004). The effect of Saudi stock market on an international market like US indicates that the Saudi market is maturing and is integrating with world markets. Thus, it becomes vital to examine such market for no studies so far analyse the ground mechanisms, factors that play a role in Saudi financial market and its impacts on the regional and international markets. The crash of Saudi Stock Market in 2006 had a massive adverse effect on large number of population indicating that although the development of the financial market is new, but, volatility can have large effects both within and outside of Saudi Arabia.
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