RIYADH (Reuters) – Foreign investment in Saudi-listed firms is gathering momentum despite the global financial crisis, the Saudi investment banking affiliate of HSBC said on Saturday.

Saudi Arabia in August allowed non-resident foreign investors to sign swap agreements with Saudi intermediaries, permitting indirect ownership of shares, in one of the boldest steps to date taken by the kingdom toward opening up its exchange, the largest Arab bourse, to foreign capital.

The stock market, Tadawul, had previously given foreigners access to stocks only through select funds.

“The pace of foreign investment in Saudi-quoted companies has been picking up noticeably over the period, despite various challenges and difficulties facing financial markets all over the world”, Osama Shaker, HSBC Saudi Arabia Managing Director, said in a statement.

HSBC Saudi Arabia has purchased some 4 billion riyals’ ($1.07 billion) worth of shares on behalf of foreign clients since the swap deals were allowed, the statement said.

The Saudi bourse has lost almost 44 percent of its value since August 23, when the deals were first permitted, as a rapid fall in crude prices added to investor concerns over the potential impact of the global financial crisis on the oil-based economy.

“The value and volume of purchase trades completed by HSBC Saudi Arabia for more than 30 prominent foreign-based investment institutions is a particularly significant achievement given depressed market conditions everywhere,” Shaker said.

“This reflects both the confidence of investor institutions in the Saudi economy and the strength of our company and the excellent reputation it enjoys abroad,” he added.

Shaker did not give a breakdown of these purchases. He could not be immediately reached for comment.