RIYADH, Dec 27: The Saudi stock market on Wednesday closed one of the most turbulent years in its history, ending 2006 down 52.53 per cent under strong correction pressure following seven years of continuous rise.

The market, the largest in the Arab world, has seen its capitalisation cut by half since the end of last year and as much as 500 billion dollars wiped off the market's peak value of more than 800 billion dollars.

The Tadawul All-Shares Index (TASI) closed on Wednesday, the last trading day of the year, below the 8,000-point psychological barrier on 7,933.29 points, sharply down from its 2005 closing of 16,712.64 points and below the 2004-close of 8,206.23 points.But it remains slightly above this year's worst level of 7,665.73 points reached on De 3.

The TASI has shed 61.5 per cent since it set its historical high of 20,634.86 points on Feb 25 when it began its nosedive.

"The slide had been widely anticipated after the sharp increases in the index that made the prices of most stocks highly overvalued. Speculators have greatly contributed to the collapse," Ali al-Dakkak, head of Dakkak Economic Consultants, told AFP.

Dakkak said that lack of regulations and transparency made the slide more painful. Correction forces defied government attempts to induce confidence in the sagging market, including decisions to split shares and allow foreign residents to trade directly on the bourse.