The one-to-five share split was enacted in the wake of the market correction in mid-March, in an effort to increase trading volumes and give a psychological boost to investors, making shares appear cheaper. It had the desired effect. In the week after the split took effect in the first sectors, agriculture and services, average prices rose considerably.

'Some investors resumed heavily investing in speculative-grade stocks with weak financial indicators, in concurrence with splitting the stocks of agriculture, insurance and services sectors,' says Beshr Bakheet, managing partner of Bakheet Financial Advisors. 'It seems that investors' misunderstanding of the idea behind the splitting stocks led to this heavy speculation.'

Trading volumes have increased in the wake of the change, although not to the degree that might have been expected. 'Interestingly, while volumes are up, they have not risen fivefold, suggesting that small investors did not pile into the market,' says Eric Louis, equities analyst at Banque Saudi Fransi.

The other regulatory change effected in the wake of the slump, allowing foreign residents to invest directly in the bourse, has had less impact. Interest has been limited, with expatriate investors turned off by stretched valuations and the market's recent instability.

The Tadawul All-Share Index (TASI) rallied following mid-March's slump, with traders gaining confidence from the government's actions.

'As it turned out, what happened in March was a correction rather than the start of a crash,' says a Riyadh-based analyst. However, on 10 April, share prices plummeted by more than 8 per cent after the CMA suspended two unnamed dealers for share price manipulations, causing fellow investors to panic and divest their holdings.

On the primary market, the initial public offering (IPO) of shares in Saudi Research & Marketing Group (SRMG) was launched on 8 April and was 32 per cent oversubscribed after three days. The offering closes on 17 April. Several other IPOs are set to be launched in the coming weeks.