Saudi Arabia may relax shares limit for foreign investors
Wednesday, 05 08 2019, Category: Economy, Country: Saudi Arabia
Saudi Arabia’s Capital Market Authority (CMA) is considering relaxing a 49 per cent limit for foreign strategic investors in shares of listed companies due to increased demand, its chairman said on Thursday.
Foreigners currently own 5.5 per cent of Saudi equities but that could nearly double by the end of 2020, Mohammed El Kuwaiz said on the sidelines of a financial conference in Riyadh.
"We found most strategic investors are maybe looking to build more sizeable stakes," Mr El Kuwaiz said.
The kingdom has introduced a raft of reforms in recent years, winning endorsements from international index compilers MSCI and FTSE Russell, as it seeks to position its bourse as an international capital markets hub.
Local shares were incorporated into the FTSE emerging-market index in March and will join the MSCI emerging market benchmark later this year.
An upcoming sale of shares in shopping mall operator Arabian Centres Company, owned by Fawaz Alhokair Group, will be the first offering in the kingdom under Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the United States.
The Saudi stock market is the Middle East's largest exchange and has seen an upsurge in foreign fund flows since the start of the year due to the inclusion in the emerging markets indexes.
Source: The National