The CMA proposed the stock split in mid-March, following the share price crash affecting bourses across the Gulf. ‘A change in the par value was long overdue,’ says a Riyadh-based analyst. ‘Positive things have emerged from the crisis. Opening the market to foreigners is also very wise, although ideally expatriates should also be allowed to invest in IPOs [initial public offerings].’

The kingdom’s foreign residents were permitted to trade on the secondary market from 25 March. However, the authorities have so far ruled out opening up IPOs to non-nationals. The split in the par value of shares is expected to increase liquidity and provide a psychological boost to investors.

The CMA has also raised the ceiling on daily share price fluctuations back up to 10 per cent from 5 per cent. The authorities reduced the limit in late February in an attempt to control market volatility, but the move was widely blamed for fuelling the downturn (MEED 17:3:06, Cover Story).