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Saudi Arabia opens stock market to foreigners

Xinhua, June 15, 2015 Adjust font size:

Saudi Arabia opened its stock market to foreigners for the first time on Monday with a slight decline of 5 points in the Saudi shares, local media reported.

The decline in the Saudi shares is expected as foreigners will not start trading on large scale until they better understand the market, Al Eqtisadiya online newspaper said.

The opening of the Saudi market, at a capital of about 530 billion U.S. dollars, to foreign investors, is part of long awaited economic reforms in the world's biggest oil exporter.

The bourse would be one of the world's last major exchanges to welcome foreign money.

Saudi Arabia announced last year that the market will be open to eligible foreign financial institutions to invest in listed shares in the first half of 2015.

Foreigners are limited to buying Saudi stocks via swaps involving international banks and through a small number of exchange-traded funds.

Foreigners are at present believed to own no more than 5 percent of the Saudi market, and account for a smaller fraction of stock trading turnover.

Foreign investors own about 15 percent of other, much smaller stock markets in the Gulf such as Dubai. If foreigners raise their ownership of Saudi market to that level, it could mean an inflow of some 50 billion dollars into the country. Endit