Saudi Arabia sets rules for foreign investment in its stock market

Saudi Arabia’s regulator has finalised rules for direct foreign investment in its stock market.

The Capital Market Authority will allow institutional investors with a minimum of 18.75 billion riyals (Dh18.36bn) under management to invest directly in the stock market, according to the regulations published on its website yesterday after the market close. Foreign investors cannot own more than 10 per cent of the total market. The CMA has restricted foreign ownership of a single stock to 49 per cent. The stock market will open to qualified foreign investors on June 15 and the rules will be enacted from June 1. The regulator published the draft rules in August.

At present, investors from outside the GCC access Saudi-listed shares through equity swaps and exchange-traded funds.

The kingdom’s Tadawul All Share Index has risen 17 per cent so far this year, the best performer in the GCC.

The Tadawul is home to Saudi Basic Industries, or Sabic, the world’s biggest petrochemicals producer by sales and Al Rajhi Bank, the largest Islamic lender globally.

The Tadawul All Share Index rose as much as 0.3 per cent yesterday and fell as much as 0.4 per cent before closing 0.2 per cent higher in Riyadh.

* with Bloomberg News

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