In a major step towards opening the largest Arab bourse to foreign capital after years of dithering, Saudi Arabia has finally agreed to allow foreigners to buy shares listed on its stock market through licensed intermediaries.
In order to diversify market's investors base foreign investors can now buy shares through certain licensed Saudi investors, who would be the legal owners of the shares, the Capital Markets Authority (CMA) said.
The Saudi stock market, also called Tadawul, has been the least open among Gulf Arab bourses to foreign investors, up to now giving foreigners access to stocks only through select funds.
Under the new measure, potential foreign investors would be entitled to returns related to their share purchases and must take on all of the economic exposure, a CMA statement said without saying when the decision would take effect. foreign investors are now entitled to buy shares.
The announcement has come less than a week after the exchange began naming investors with stakes of 5 per cent or more to boost transparency. This move encouraged an eight-day rally on the exchange. Last December, the market regulator had said the kingdom would gradually begin allowing foreign money in through licensed firms.
