Tadawul may be closing windows to open doors

Saudi Arabia likes to play hard to get with foreign investors, restricting ownership of companies on its stock exchange to its own citizens and those of the UAE and other Gulf Cooperation Council states.

The authorities are carrying that diffidence to a new extreme in a dispute with MSCI Barra, a compiler of stock indices followed by professional investors around the world. The subject matter probably will seem trivial to anyone who does not create indices or operate a stock exchange for a living, but the disagreement may have significant implications – possibly bearish, but more likely, if unexpectedly, bullish – across GCC markets and especially in the UAE.

Here are the details: The Saudi exchange, known as Tadawul, has threatened to withhold market information from MSCI unless it promises to seek the exchange’s approval before licensing indices that use the information to third parties that create financial products, such as exchange-traded funds. MSCI has counter-threatened, saying it would drop Saudi stocks from its Middle East indices.