DUBAI: Overseas investors in the Saudi Arabian stock market will face restrictions including a 20 percent ceiling on combined foreign ownership of any listed stock, a major Saudi newspaper reported yesterday.
The Capital Market Authority announced in late July that the market, the Arab world’s biggest bourse, would open to direct investment by foreign institutions in the first half of next year. Currently, foreigners are limited to indirect investment through swaps and exchange-traded funds. The CMA said it would publish draft regulations for the reform in August, before a 90-day public consultation period.
The Asharq Al Awsat quoted unnamed sources yesterday as saying the decision to open the market was based on the principle that foreigners would not be allowed to own more than 20 percent in total of the paid-up capital of any firm.
Also, “foreign funds will not be permitted to hold more than 10 percent of the market value of Saudi stocks,” the newspaper said.
If foreigners are limited to owning only 10 percent of the overall Saudi market, which has a capitalisation of about $580bn, that could disappoint investors; foreign ownership of some other major emerging markets around the world is considerably higher.
Reuters
