Financial advisers and analysts have urged small investors in the stock market to put their money into investment funds to buy and sell local stocks. They usually suggest and advise claiming that what they say is the safer and idealistic method of increasing their financial savings. They also claim that investment funds are usually run by financial analysts and experts with high competencies and are capable of running things professionally.
Thousands of citizens have invested in these funds because of the promotion campaign that says funds guarantee double and triple profits of the capital sum initially invested. At the beginning of 2006, the number of investment funds reached more than 200 with a capital sum estimated to be more than SR138 billion representing the savings of over 660,000 investors.
However, the reality is different. After the enormous stock market crash last February, the truth behind these funds was exposed. Advisers, analysts and stockbrokers hid the ugly side of the truth and abused investors by stealing their money legally. Why not? Their motto now is that the law doesn’t protect investors.
Till now, investors have lost the majority of their capital sums despite the fact that the stock market was refreshed even if partially. A large number of victims had to sell their units or shares fearing they might experience more losses. Some investors wish that they could bring back their initial capital to escape the stock market nightmare once and for all.
What is really ironic is that some analysts still insist that investment funds are safe and beneficial. Their decisions are based on one of two things, they are either ignorant of the truth or they are stupidly repeating things that they hear from friends and colleagues just like parrots. Perhaps they might have other motives, but I like to base my judgments on good intentions so let us stick to the former two choices.
Unfortunately, banks have decided to act as opponents and judges when it comes to stock market issues. There are no regulations or bylaws that govern the process and give investors the right to question banks and investigate loss cases despite the fact that questioning and knowing is a basic right of every investor who is part of a commercial project.
My message on behalf of thousands of people is directed to the Saudi Arabian Monetary Agency. They should take full responsibility and intensify supervision on investment funds. They need to take serious action to save the remaining of investors’ money, who have no power or authority to change anything. We don’t need only annual reports and statistics for the Saudi economy that are printed in the best shape and form. The same message is directed to the Capital Market Authority, which is the supervisory and organizational sector for the Saudi stock market.
