CMA’s Vice Chairman says ‘The Market Story’ book documents milestones in Saudi economic history

Youssef Al Blihid, Vice Chairman, Capital Market Authority

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While the Saudi capital market, the region’s largest market with the highest liquidity, marches ahead, its history has become the focus of investors worldwide, given its high importance, and current momentum.

 

In a serious attempt to document the historical moments witnessed by the market since its inception, “The Market Story” book comes in an unprecedented initiative to document a story of success by the Kingdom’s economic sector and other capital markets in the region.

 

Youssef Al Blihid, Vice Chairman of the Capital Market Authority (CMA), said the market regulator worked on an initiative to record the Saudi capital market history in an academic and documentary manner for long chapters of the capital market history, to make it easier for researchers and investors and help them coexist with the key milestones in this market.

 

The documentation journey took almost two years of research to go through hundreds of historical documents and more than 80 interviews with leading figures, who contributed to the capital market journey.

 

Al Blihid pointed to information, which was uncovered for the first time in “The Market Story” to embody ancestors’ efforts and their keenness to spread advanced economic thinking at the early period after the unification of the Kingdom.

 

Here’s the full interview with Al Blihid:

 

Q: What is the initiative for documenting the Saudi capital market journey?

 

A: It is an initiative adopted by the CMA to document the capital market history since inception. It aims to document the capital market’s journey in an academic manner by collecting all possible documents and information, so as to be a reference for all academics and researchers in the capital market and to offer lessons to the CMA about the successive developments it witnesses.

 

The initiative targeted to collect the largest number of documents related to the market evolution, to contribute to future research for the capital market development.

 

Everyone knows that the capital market went through several phases, when certain people had a great contribution to deepen and organize the market. Through this initiative, we can honor those people who helped establish and develop the capital market by documenting their roles and efforts, which bore fruit for newer generations.

 

Q: What are the other products to be introduced under this initiative?

 

A: The initiative included several products, which started with ‘The Market Story” book in two editions. First, a research edition, which objectively addressed the facts of that historical period. Second, a photo history, which epitomized the first edition in impressive photos. Many specialists and researchers can make use of this photo book that briefly shows the capital market story.

 

Other products will follow in the coming period.

 

Q: What is that book about? How can readers benefit from it?

 

A: The Market Story is a book that addressed the Saudi capital market history through a documentary using an academic methodology. This comes after reading the events, collecting documents, conducting interviews with a large number of existing and former leaders in the capital market, as well as other experts and practitioners who directly or indirectly played a role in the progress of the capital market.

 

This documentary recorded the development of the Saudi capital market in three phases. It started with the foundation of national joint stock companies in early 20th century and the challenges they faced. In the second phase, the book addressed the formation of a ministerial committee to monitor the market. The book also shed light on the third phase that witnessed the enactment of the Saudi capital market law and the establishment of the related system.

 

The book depended on an academic methodology that mixes the historical and descriptive approaches by reading events, collecting documents, and holding interviews with the current and former leaders in the capital market, as well as a group of other market experts, and practitioners.

 

Q: Who were the figures you interviewed to document the market story?

 

A: At the beginning, I, and the members of the steering committee for documenting the Saudi capital market, and on behalf of the CMA, express gratitude for everyone who took the time and helped us succeed in this journey. This work would not have been possible without the support of everyone who shared the gift of their time to make this book see the light of day.

 

As many as 80 figures and leaders were interviewed. They contributed significantly to the capital market development. We interviewed Mohammed Abalkhail, former Minister of Finance, to speak of the capital market from 1950s to 1970s. As we also tried to link the part past to the future, we were honored by Minister of Finance and former Chairman of the CMA, Mohammed Al-Jadaan.

 

We also met Ibrahim Al-Assaf, Hamad Al-Sayari, Fahad Al-Mubarak, and other board members of the CMA, as well as some experts.

 

In the same vein, we also met several influential figures from the private sector.

 

Q: The book was titled “The Market Story”, so does it present information related to the stock market only or the market history and major events?

 

A: Readers may not accept the financial and economic information for being specialized and analytical. In the “Market Story" book, we tried to present the information in an interesting historical and narrative style that combines the easy language with interesting stories and financial information.

 

Readers will find stock market-related information that has not been covered in any other book, as we talked about the previous trade council, and the stories of establishing the electricity, gypsum, cement and gas companies.

 

The book includes first-to-be-narrated stories, quoting those who attended such events. For example, we talked about the story of setting up the Public Investment Fund (PIF), and the methods of trading through brokerage offices.

 

Further, we shed light on the story of establishing an organized market, including the formation of the ministerial committee after the initiative of Muhammad Abalkhail, Minister of Finance at that time. He sent a memorandum to the Custodian of the Two Holy Mosques King Fahd bin Abdulaziz, explaining many important issues witnessed by the market during that period. He also highlighted the important role of the Saudi Central Bank, formerly the Saudi Arabian Monetary Agency (SAMA), and its role with banks in the first phase of the market. The book also included the story of the central trading hall as the first attempt to create an organized market, and the important role played by Jammaz Al-Suhaimi during this important era of the Saudi stock market, to link the two important phases before and after setting up the CMA. We also presented for the first time the story of issuing the Capital Market Law and forming the first CMA board.

 

In addition, we discussed some of the important IPOs affecting the market, such as Riyad Bank, Saudi Basic Industries Corp. (SABIC), and Saudi Aramco.

 

In the book, we talked about the 2006 crisis, and interviewed several people who witnessed it, to explain its circumstances to the readers.

 

The readers will also find in the documentary edition some historical documents, such as royal decrees, old stock certificates, ownership notices, and historical photos.

 

The team made great efforts to review several important documents, researches, and books that dealt with the financial market in Arabic and other languages. We presented them in an easy and attractive language.

 

Q: Many know that the capital market and joint stock companies emerged in 1930s. Does this book uncover new information to document this important phase in the Kingdom’s history?

 

A: Yes, we found new information that is published for the first time in The Market Story. The idea of establishing joint stock companies and the capital market dates back to the pre-unification of the Kingdom. Some joint stock companies emerged in early 1916 simultaneously with the National Company for the Service of the Sacred Country Residents.

While some historians in the Saudi era wrote that the first Saudi joint stock company was incorporated in 1935 after the enforcement of Commercial Law in 1931, it is evident that the concept of shareholding was already in the mind of the founding King before the unification of the Kingdom. When the Eastern and General Syndicate won a concession for oil exploration in 1923, King Abdulaziz – May Allah have mercy upon him – began to take the necessary arrangements to found a national joint-stock oil company. King Abdulaziz also granted a concession to establish an automotive company in Hijaz land for 20 years from the date of the concession endorsement in March, 1926.

 

Q: What are the challenges you faced during the documentation journey?

 

A: The documentation journey lasted more than two years of painstaking research, based on hundreds of historical documents and arrangement of meetings with more than 80 personalities who contributed to and participated in the journey of the financial market, and many scientific references.

 

We faced many challenges due to the scarcity of documentation and lack of scientific sources in the first stage. Thus, we relied on the available information in historical documents, researches and books. We also obtained a lot of information scattered between more than one entity, and we chose from them what is frequently stated and what is confirmed by historical documents.

 

In addition, the first and second phases of the financial market were extremely difficult, in the absence of some figures who passed away, in addition to the scarcity of documents in those phases.

 

In the third phase, the difficulty was to re-write a large number of specialized scientific documents and literature in an easy template that reaches the target readers of the book in an uncomplicated scientific manner.

 

Q: How can readers obtain the two editions of the book?

 

A: Readers can review the electronic version of the book via the authority’s official website. The book will be gradually made available on other platforms. The book can also be read through smart applications and devices. Hard copies will be available in public and university libraries across Kingdom.

 

Q: Do you expect to release an updated version of the book later?

 

A: We expect to receive more documents related to the stock market from interested people after the book release. We invite everyone to provide us with proposals and available documents to update the current version of the book, through communicating with the authority. All can participate in the process.