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Saudi stock market reaches highest levels since financial crisis - ASHARQ AL-AWSAT English Archive
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A Saudi trader monitors stocks at the Saudi stock market in Riyadh, Saudi Arabia on April 28, 2013. (Reuters/Faisal Al-Nasser)

A Saudi trader monitors stocks at the Saudi stock market in Riyadh, Saudi Arabia on April 28, 2013. (Reuters/Faisal Al-Nasser)

Riyadh, Asharq Al-Awsat—Saudi Arabia’s stock market, the Tadawul, continued its recent string of gains on Monday, surpassing the 11,000-point mark to reach its highest levels since the collapse of Lehman Brothers in September 2008.

Just after the start of trading on Monday, the main index, the Tadawul All Share Index (TASI), had jumped 1.34 percent, or 146 points, from the 10,903 points it reached on close of trading on Sunday, to reach 11,049 points.

At the time of writing the TASI had slipped to 10,849 points.

This comes after the Saudi financial regulator, the Capital Markets Authority (CMA), announced on Thursday further details of plans to open up the Tadawul to direct investment by foreign firms.

The CMA announced on its website it will impose a 10-percent cap on the entire foreign ownership of the Tadawul’s total value when the market opens up to foreign firms in early 2015. Another 5-percent cap will be imposed on any individual foreign firm or institution’s ownership of a firm listed on the exchange.

Other requirements imposed on foreign firms and institutions include investment experience of no less than five years and a minimum 5 billion US dollars of assets under management.

Since the announcement in July regarding foreign investment in the Tadawul, the TASI has surged almost 12 percent.

Commenting on the market’s recent performance, financial expert Fahd Al-Mishari told Asharq Al-Awsat on Sunday he believed this was down to the recent decision by the CMA to liberalize the exchange for foreign investment.

He said the Tadawul—which at a 580 billion dollar market cap is the region’s largest stock market—had now distinguished itself among its competitors in the region.

“In light of the geopolitical deterioration the region is currently witnessing, the performance of the Saudi market is extremely positive,” he said.

Speaking to Asharq Al-Awsat, Salem Beagaga, a professor of accounting at Ta’if University, said that the Tadawul’s liquidity levels, already the highest among regional competitors—currently standing at 16 billion Saudi riyals (4.3 billion dollars)—had risen markedly during the previous days.

“So long as confidence in the Saudi stock market is increasing, so will the demand to buy more stocks,” he said.