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Saudi Arabia to open $530bn bourse to foreigners in early 2015
28 July 2014
The Saudi Government has given permission to the country's
financial regulator to open the stock market to direct investment by foreign
financial institutions.
The cabinet authorized the Capital Market Authority –
at a time it sees as appropriate – to allow foreign financial institutions to
buy and sell stocks on the Saudi stock market, according to rules to be laid
down by the CMA. The statement did not specify a timetable for the market to be
opened, or give any details of the rules under which the reform would take
place, but according to the article below from Arab News this will start in
2015. Saudi authorities, who want to use the market to create jobs, diversify
the economy beyond oil and expose local firms to more market discipline, have
been preparing for the opening for years, and have completed most technical
preparations. But the government has delayed implementing the reform,
apparently concerned about causing volatility in the market as well as the
political sensitivity of allowing foreigners to build large stakes in top Saudi
companies.
Such decisions by the Saudi government indicate that
they want to diversify as much as possible the economy of the country and not
depend only on oil and gas revenues and this is one of the sectors which will
boost further the financial resources of the country.
Further information on this article can be found at: http://reut.rs/1piRuWd
