Risk-free share fund for Saudis

RIYADH - King Abdullah has found a novel way to bring some stability to Saudi Arabia's troubled sharemarket - he is setting up a state-guaranteed, risk-free fund for Saudis to trade with a maximum investment of 500,000 riyals ($214,300).

"This fund ... will be set by the state for people with limited income, and those who wish to invest more than 500,000 riyals will not be allowed," the King said.

Small investors "will be able to buy and sell for two years; if they win then this is their luck, with God's will, and if they lose, then their capital is preserved with us."

He gave no indication when the fund would be established.

Hundreds of thousands of ordinary Saudis have lost money in a market that shed nearly half its value in three months. The authorities blame wealthy speculators for manipulating the market.

- REUTERS