Saudi Arabian stock exchange to open up to foreign investments

Foreign investors will need to match strict criteria before buying into a public company
The Kingdom of Saudi Arabia is today opening its $500bn-plus Tadawul stock exchange to direct foreign investments, with the move to be closely watched by investors seeking opportunities in the Middle East.

Under the new rules, qualified foreign investors with a minimum $5bn in assets under management and at least five years’ experience in the securities business will be able to own up to 20 per cent of the shares of any individual company listed on Tadawul.

Although opening the market to outside investors is expected to result in greater interest in the sector, Mohammed Aljadaan, the chairman of Saudi Arabia’s Capital Markets Authority (CMA), has downplayed the significance of bringing capital or liquidity to the market as a focus of the decision.

The CMA includes the pursuit of increased stability and lower levels of high-level price volatility among the objectives of the move to open Tadawul, which would be supported by increased institutional investment.

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