No Date Yet On Saudi Bourse Opening Up To Foreign Investors

Saudi Arabian officials are still discussing the opening of the stock market to direct foreign investment and no timetable has been set, the chief market regulator said on Sunday.

“We are still discussing the issue. I said this a few months ago and I don’t think anything has changed,” Mohammed bin Abdulmalik Al al-Sheikh, head of the Capital Market Authority, said at a securities industry conference.

“Some government entities are looking into the issue and once there is something we will announce it. So far there is nothing new.”

Foreigners – excluding Gulf Cooperation Council nationals, who have special access – can only buy Saudi shares through swap deals made by international investment banks or via a small number of exchange-traded funds. Al-Sheikh said foreign investment through swap agreements now accounted for 1.25 per cent of the market, compared to zero about five years ago.

Saudi authorities have for years been laying plans to open the market, but they have not fixed a date to do so. Al-Sheikh on Sunday dampened heightened speculation in the securities industry over the last several months that an opening might be near.

“The market is abundant with liquidity and we do not need foreign investors’ liquidity. What we need is the other things like increasing transparency, improving governance and training Saudis, so we focus on the other things,” he said.

Al-Sheikh also said authorities aimed to increase the overall level of institutional investment in the stock market and therefore hoped soon to launch new tools for institutional investors.

Current tools are mutual funds, real estate investment funds and swap agreements; the swap agreements exceeded SAR20 billion ($5.3 billion) by the end of June, Al-Sheikh said without elaborating on the planned new tools.