Move to open Saudi Stock Exchange to foreign investors will support growth of non-oil sector
Saudi Arabias Capital Markets Authority (CMA) has said there will be a 90-day consultation period starting soon, through which investors and interested parties will discuss how to establish the rules governing foreign investors entry into the exchange.
Following the consultation, the exchange could be open to foreign institutions to buy and sell stocks during the first six months of next year, the CMA said in a statement on 22 July.
The statement follows the Saudi cabinets approval earlier this week of the opening up of the Saudi market to international investors.
The exchange is capitalised at about $530bn and is the Arab worlds largest exchange. The opening up of the exchange has been eagerly awaited by international investors, and has been under debate for several years.
Previously, the authorities have not stipulated a specific time frame for the opening of the Tadawul, which makes the recent news much more exciting, says one Dubai-based equities analyst.
It is definitely a step change for Saudi Arabia, he tells MEED over the phone.
Up to now, the exchange was only open to domestic investors and foreigners have only been allowed access to the Saudi market. Foreigners had limited options to buy Saudi stocks, either doing so via swaps with international banks, or through a select number of exchange-traded funds.
The kingdom is implementing a $130bn spending plan aimed at diversifying its economy away from the oil industry.
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