Middle-east Arab News Opinion | Asharq Al-awsat

Foreign Investors Show Interest in Saudi Shares Market after Ease of Restrictions | ASHARQ AL-AWSAT English Archive 2005 -2017
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A trader points up at a display on the floor of the New York Stock Exchange in this August 20, 2012, file photo. REUTERS/Brendan McDermid

Riyadh- Some foreign investors have expressed interest in investing in the Saudi shares market after relaxing the restrictions and setting new rules for the market that will become effective soon. The rise of foreign investors’ requests is estimated as 100% in August 2016 compared with same month in 2015.

It is well-known that researches and financial consultations companies that are licensed from the Saudi Capital Market Authority issue reports and researches on local shares market on regular basis. An official from one of these companies told Asharq Al-Awsat that most foreign investment files applied come from East Asian countries, Europe and the U.S., noting that relaxing the restrictions was a major motivation for investors.

In current time, the Saudi shares market has become an investment destination that attracts foreign capitals after introducing the new rules of the market and relaxing the restrictions imposed on foreign financial institutions interested in investing in the local shares market.

Starting September 4, foreign financial institutions will be infront of a promising chance to invest in the Saudi shares market since the new restrictions and conditions will be activated on the 4th. Restrictions included declining minimum required assets value managed by the applicant company to reach SAR3.75 billion (USD1 billion) instead of SAR18.75 billion (USD5 billion) or even more as it was the case before updating the rules.

In the same context, Tadawul announced that foreign purchasing via direct foreign investment reached SAR6.3 million (USD1.68 million) in last week’s session 21-25 August.

The regulations consist of 24 items on procedures, requirements, obligations and conditions for qualified foreign investors to register in the Saudi Capital Market.

More categories are now included in the qualified foreign financial institutions such as public authorities and state affiliated institutions. Also, the foreign investor is now permitted to deal with a head of a Saudi or non-Saudi portfolio to manage his investments in the Saudi capital market.