FT.com - Saudi Tadawul poised to exercise more global appeal

Saudi Arabia’s Tadawul stock market may be the largest and the most liquid in the oil-rich Arab world – but until recently it was nearly impossible for international investors to access. That is now tentatively changing.

In August 2008, the Saudi Capital Markets Authority(CMA) allowed foreign investors to buy Saudi shares indirectly by means of “total return swaps” via licensed brokers in the kingdom.

The swaps do not give voting rights, but the decision allowed international investors to gain direct access to individual shares for the first time. Previously only Saudi and Gulf Arab investors or “local” international banks such as HSBC were allowed to buy shares, which severely curtailed international capital inflows.

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