8/28/2008

Saudi Arabia opens its stockmarket, at last, to foreign investors

Saudi Arabia opens its stockmarket, at last, to foreign investors. They are likely to take full advantage

The gradual process of opening the Saudi stockmarket to foreign investors has taken a significant step forward with the announcement that non-residents will be entitled to trade in local stocks through Saudi intermediaries. The news prompted an immediate rally in the market—which has lost ground so far this year—in apparent anticipation of a surge in foreign interest. That optimism is well-founded, as there is plenty of value to be found on the Saudi bourse, which is by far the largest in the Middle East by market capitalisation, and most of the big names in global equity investment have a presence in Riyadh.

The announcement from the Capital Market Authority (CMA) on August 20th stated that "authorised persons" (in other words local entities licensed by the CMA) may enter into swap agreements with non-resident foreign investors, both individual and corporate, to transfer the economic benefits of shares listed in the Saudi Stock Exchange (Tadawul). Legal ownership of the shares will reside with the Saudi intermediary. ...



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[Source: The Economist: News analysis - Posted by FreeAutoBlogger]

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