The Saudi stock exchange, commonly known as the Tadawul, is seeking ways to boost foreign stock ownership, beginning by holding talks with companies already trading on other Gulf Cooperation Council exchanges.
In an interview in Riyadh on Sunday, Chief Executive Office of the Tadawul Khalid Al Hussan said that the talks will aim to get companies in other GCC exchanges cross-listed in Saudi Arabia by 2018. The Kingdom has allowed foreign investors to trade stocks directly in the exchange since 2015 – total foreign ownership of Saudi stocks rests at about 4 percent currently.
The Saudi stock exchange is on track for its own initial public offering next year.
According to Capital Market Authority Vice Chairman Mohammed El-Kuwaiz, the Tadawul has about 50 qualified foreign investors and expects to draw more after shifting to a T+2 cycle by the end of June. The current system requires same-day settlement.
“T+2 is the last missing piece of the puzzle for MSCI to move forward on possible including Saudi Arabia on its emerging-market watch list,” said Wafic Nsouli, the managing director and head of equities at the Dubai-based investment bank Arqaam Capital Ltd. “The is a game changer for the country and the wider region and one we expect as soon as May.”
Saudi Stock Exchange: Maximizing the Kingdom’s Investment Capabilities
The ongoing privatization of state-owned assets, including leading companies, property and other assets, will bring in new and more diverse revenues for the Saudi government, according to the Vision 2030 plan.
Saudi Arabia will become market makers in selected sectors, as well as a leader in competitively managing assets, funding and investments. This will require the formation of an advanced financial and capital market open to the world, allowing greater funding opportunities and stimulating economic growth. To this end, the government will continue facilitating access to investing and trading in stock markets.
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