Saudi CMA Head: Will Open Stk Mkt Gradually To Foreign Investors

Zawya: The Capital Market Authority wants to ensure its planned move would not affect the market’s stability, Abdulrahman al-Tuwaijri, the CMA’s chairman, told executives of listed companies and reporters in Riyadh, but did not give a time frame for the opening. The Middle East’s biggest market, known as the Tadawul, currently allows foreign investors to access the local market via share-swaps and exchange traded funds. The CMA hopes that opening the market to foreign investors will lift their participation which currently stands at around 4%, al-Tuwaijri added. Saudi Arabia has taken several steps recently, which some think could be the prelude to a more significant change – the long-awaited decision to allow limited foreign investment in local equities.

The market watchdog in January published regulations that would allow foreign firms to list their shares on the Saudi stock market. And in February it tweaked disclosure rules related to swap agreements to improve transparency on foreign ownership of shares through p-notes. It is also discussing draft proposals, viewed by Zawya Dow Jones, that indicate that the kingdom is likely to take the “qualified foreign investor” approach, similar to the route taken by China in opening up its stock market.