* Stock market fall not justified, Prince Alwaleed says
* Saudi economy is in "very strong shape"
* May invest further $133 million in Saudi stock market
(Adds Alwaleed, analyst comments, background)
By Ulf Laessing
RIYADH, March 9 Saudi billionaire Prince
Alwaleed bin Talal threw his weight behind Saudi stocks on
Wednesday, saying he would invest 1 billion riyals ($267
million) in a market pummelled by unrest in the Arab world.
Prince Alwaleed, a nephew of Saudi Arabia's King Abdullah
and a prominent investor in Citigroup (C.N), said at a press
conference that he had invested more than 500 million riyals in
banks, petrochemicals, telecoms, industrial and consumer stocks,
and was ready to spend a similar amount in the future.
"The stock market fall is not justified," he told reporters,
adding that the economy of the world's top oil exporter was
"The Saudi economy is very strong, and the bourse is in a
strong position," he told reporters called to a news conference.
"Saudi stocks are cheap, and there are big opportunities."
Some investors remain nervous ahead of a planned protest on
Friday, March 11, despite the king's plan to spend an estimated
$37 billion to ease social tensions in the OPEC member, where
over 10 percent of the 19 million locals are unemployed.
Just 90 minutes before Alwaleed spoke, Saudi Foreign
Minister Prince Saud al-Faisal, another nephew of the king, took
the podium to tell reporters that the best way to bring about
change in the country was through dialogue.
"The principle of dialogue, I believe, is the best way to
address the issues facing society," Faisal said, adding that
protests in the conservative kingdom were forbidden.
Saudi stocks .TASI hit a 22-month low on March 2, falling
nearly 20 percent in a two-week span as fears of domestic unrest
in the conservative kingdom triggered panic selling by
It has since recovered 14.8 percent, helped by last
Saturday's comments from Saudi Finance Minister Ibrahim Alassaf
that the economy was in "excellent" shape and a rise in oil
prices would help strengthen the kingdom's economic and
"This follows on from the minister's comments, and you could
look at these (Prince Alwaleed's) statements as a policy
response to concerns about possible unrest in Saudi Arabia. It's
a confidence-boosting measure for retail investors," said
Ibrahim Masood, senior investment officer at Mashreq Bank.
Public revolts against autocratic regimes and economic
hardships have swept through the Arab world over the past two
months, unseating Egyptian and Tunisian leaders and sparking
insurrection in Libya.
Although Saudi Arabia's huge oil wealth has provided a high
standard of living compared with many of its neighbours,
rumblings of discontent from the Shi'ite minority last week have
alarmed Riyadh and investors who once thought that relative
prosperity would be insulation against the spreading unrest.
Retail investors account for around 85 percent of Saudi
Arabia's market turnover.
Foreign investors, through swaps agreements, have an
estimated $1.5 billion invested in Saudi shares as of February,
said Ankit Gupta, senior research analyst at Securities &
Investment Co (SICO) in Bahrain.
Oil prices, which rose above the $100 per barrel mark on the
regional unrest, are expected to help the kingdom and other Gulf
crude exporters to finance the increased social spending in the
Prince Alwaleed also said his company, Kingdom Holding
4280.SE, was still in talks with Kuwait's Zain (ZAIN.KW) to
buy the telecom's Saudi assets. [ID:nWEA7543]
(Additional reporting by Matt Smith, writing by Shaheen Pasha;
Editing by Will Waterman)