Saudi Arabia to allow limited foreign ownership of stocks

Ahram Online, Sunday 11 Dec 2011

Under new proposals, foreigners with at least $5 billion under management may be able to hold up to 5 per cent of a stock's issued share capital

stock market
Saudi Arabian stock market (Photo: Reuters)

Saudi Arabia is expected to ease regulations on direct foreign ownership in its stock exchange market (Tadawul), according to unnamed industry sources cited by Reuters. 

The Capital Market Authority and the Tadawul are said to have indicated the details of the proposed framework to market participants. 
 
The proposed plan will limit foreign direct ownership to investors with at least US$5 billion under management and allow each to hold a maximum 5 per cent of a stock’s issued share capital. 
 
Total direct ownership of each stock will not be allowed to exceed 20 per cent of the issued share capital, and total foreign investment in a listed firm will not be allowed exceed 49 per cent. 
 
Details of the new framework have not been officially disclosed and remain confidential. 
 
The chief executive of Tadawul last week stated that a timeframe for easing regulations on foreign ownership is yet to be finalised.  At present, foreigners have limited opportunities to invest through indirect ownership and exchange traded funds that track the indexes.
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