19/08/2014 11:06 AST

Overseas investors in the Saudi Arabian stock market will face restrictions including a 20 per cent ceiling on combined foreign ownership of any listed stock, a major Saudi newspaper reported on Tuesday.

The Capital Market Authority announced in late July that the market, the Arab world's biggest bourse, would open to direct investment by foreign institutions in the first half of next year. Currently, foreigners are limited to indirect investment through swaps and exchange-traded funds.

The CMA said it would publish draft regulations for the reform in August, before a 90-day public consultation period.

The Asharq Al-Awsat newspaper quoted unnamed sources on Tuesday as saying the decision to open the market was based on the principle that foreigners would not be allowed to own more than 20 percent in total of the paid-up capital of any firm.

Also, "foreign funds will not be permitted to hold more than 10 percent of the market value of Saudi stocks," the newspaper said without elaborating.

If foreigners are limited to owning only 10 percent of the overall Saudi market, which has a capitalisation of about $580 billion, that could disappoint investors; foreign ownership of some other major emerging markets around the world is considerably higher.

A CMA spokesman, contacted by telephone, said the rules were still in the final consultation stage in the CMA's legal department, and would be published in a few days for public consultation.

He said he could not comment on the accuracy or otherwise of the Asharq Al-Awsat story.

Foreign funds investing in Saudi Arabia would need to have minimum assets of $1 billion, and individual or retail investors would not be allowed to own shares in Saudi companies except through these funds, the newspaper said.

Also, foreign funds would not be allowed to own shares in certain real estate developers with operations in the holy cities of Makkah and Madinah, to ensure that non-Muslim investors did not own assets there.

Such companies include Makkah Construction and Development Co, Taiba Holding and Jabal Omar Development Co, the newspaper said.

The foreign ownership limits could reduce Saudi Arabia's weighting in major international equity indexes compiled by companies such as MSCI, if the index compilers choose to include the country after foreign investors are allowed in.

When Qatar and the UAE were added to MSCI's emerging market index in May this year, their ceilings on combined foreign ownership - in many cases, around 20 percent or higher - caused MSCI to restrict their weightings.


Reuters

Ticker Price Volume
SABIC 114.77 5,915,941
SAMBA 26.98 1,138,683
STC 83.41 257,644
DARALARKAN 13.47 74,648,349

TASI 7,871.67 71.90 (0.92%)

Market
P/E
Price/BookValue
Dividend Yield (%)
Performance
  • 1-Month
  • 3-Month
  • 1-Year
Volume Change
  • 10D Avg Vs 90D Avg
Index vs...
  • 52-w high
  • 50-day moving avg.
  • 200-Day Moving Avg
Ticker Price Change
SABIC 114.77 0.02 (0.01%)
STC 83.41 2.09 (2.57%)
NCB 64.98 0.35 (0.54%)
RJHI 76.03 0.78 (1.03%)
SECO 20.62 0.12 (0.58%)
Foreign investors pile into Saudi Arabia in March amid kingdom's FTSE upgrade

05/04/2018

Foreign investors bought $1.18 billion in Middle East and North African equities in March, especially Saudi ones amid the kingdom’s upgrade to emerging market status by FTSE Russell, according to a r

The National

Muscat bourse gains lifted by activity in financial shares

05/04/2018

Buying activity in financials lifted the MSM30 Index to 4,794.61 points, up 0.41 per cent. The MSM Sharia Index closed at 676.52 points, down 0.08 per cent. Gulf Investment Services was the most acti

Times of Oman

Dubai bourse takes a hit in traded value

05/04/2018

Traded value on the Dubai Financial Market tumbled on Wednesday as global stocks declined amid an intensifying US-China trade war. In Abu Dhabi, banking shares surged ahead of first quarter results s

Gulf News

Financial blue chips drive Muscat bourse recovery

04/04/2018

Driven by financial blue chips, the MSM30 Index continued its recovery to close at 4,775.27 points, a gain of 0.53 per cent. The MSM Sharia Index ended at 677.06 points, down 0.07 per cent. HSBC Bank

Times of Oman

Emaar Properties stock hits new one-year low

04/04/2018

Emaar Properties shares extended losses for another session on Tuesday, to hit their lowest level in a year, as selling continued on the wider Dubai gauge. Emaar Properties fell to a low of Dh5.58, b

Gulf News