Saudi Arabia’s stock exchange, the Tadawul, closed 0.9 per cent down as it opened to direct foreign investors for the first time on 15 June.

The Tadawul All Shares Index (TASI) fell 83 points to 9562.

The industrial investment sector was the hardest hit, falling by 1.8 per cent.

Petrochemicals giant Saudi Basic Industries Corporation (Sabic), the Tadawul’s largest listed company, also fell by 1.5 per cent, and was the most traded share by value.

Analysts had warned that foreign capital would be slow to enter the market, and it would take months or years for the effects to be felt.

The strict qualification rules and limits on foreign ownership, at 10 per cent of total value, were intended to reduce volatility as foreign institutional investors began trading.

The Capital Markets Authority has not announced the qualification of any international institutional investors, but interest has been high.

The Tadawul is seen as slightly overvalued, with a price to earnings ratio of 16.5 times, 30 per cent higher than MSCI’s emerging markets index, according to Dubai’s Emirates NBD.

Lower oil prices have also dampened the market, although it rose in anticipation of the opening.

The May slowdown of the market has been related to seasonal lows caused by Ramadan and summer breaks.