Saudi Arabia foreign investment welcome unlikely to open the floodgates | The National

Saudi Arabia foreign investment welcome unlikely to open the floodgates | The National:

"Saudi Arabia’s easing of rules for foreign investors’ participation in the stock market starting on Sunday may be a positive step, but it is unlikely to spur an immediate burst of foreign cash owing to slow growth and lingering market limits, analysts said.

Saudi Arabia’s market regulator, the Capital Market Authority, had announced the timeline for new rules last month in a bid to attract international investors, who currently own only 1 per cent of the market. The Saudi equity market, the Arabian Gulf’s largest with a market capitalisation of US$593 billion, allowed foreigners direct access to stocks in June last year. However, it has failed to perform, with the market shedding 12.8 per cent so far this year.


"We may see a marginal rise in foreign investment, but foreign investors will want more clarity on the macro outlook before buying in large volumes," said Simon Kitchen, the head of macro-strategy at the Egyptian investment bank EFG Hermes."



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