Saudi to Open $531 Billion Stock Market to Foreigners - News and Current Events | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events

Saudi to Open $531 Billion Stock Market to Foreigners
Started:July 22nd, 2014 (10:07 PM) by kbit Views / Replies:163 / 0
Last Reply:July 22nd, 2014 (10:07 PM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Saudi to Open $531 Billion Stock Market to Foreigners

Old July 22nd, 2014, 10:07 PM   #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,839 since Nov 2010
Thanks: 3,275 given, 3,321 received

Saudi to Open $531 Billion Stock Market to Foreigners

Saudi Arabia, the oil-producing kingdom whose stock market has been off-limits to outsiders, will allow foreign investors to buy and sell shares next year as it seeks to lure capital to the $745 billion economy.

The country’s benchmark Tadawul All Share Index climbed to a six-year high after the Riyadh-based Capital Market Authority said today it will open the stock market to foreigners in 2015, and publish the rules for participation next month. Opening the market to international investors may prompt MSCI Inc. to classify the gauge as an emerging market, luring as much as $40 billion of foreign cash, according to Schroders Plc.

Saudi Arabia, the world’s biggest exporter of oil and de facto leader of OPEC, is removing barriers to one of the world’s most-restricted major stock exchanges as the government pursues a $130 billion spending plan to boost non-energy industries. King Abdullah, the 90-year-old monarch, has kept the economy expanding at an average rate of 6.4 percent in the past four years even as Middle Eastern neighbors from Egypt to Iraq grappled with political turmoil.

The Tadawul surged 2.8 percent to 10,025.14 at the close, the strongest level since May 2008.

“The big sleeping giant in the region is Saudi Arabia, a well-capitalized and large market that foreigners couldn’t get access to,” Gary Dugan, the chief investment officer at National Bank of Abu Dhabi PJSC, said by phone from Abu Dhabi. “It’s exciting. It gives greater credibility to the region.”

MSCI Prospect

The CMA will seek feedback from investors and the public on the rules for 90 days and will review responses by the end of the year, it said in a statement on its website. Saudi’s exchange is currently limited to domestic investors and foreigners from the six-nation Gulf Cooperation Council. The kingdom is the Organization of Petroleum Exporting Countries’ biggest producer.

The move is a “giant step” toward inclusion in MSCI’s emerging-markets index, NBAD’s Dugan said. Saudi Arabia is the biggest stock market outside China, where domestic shares are excluded from MSCI’s global gauges because of limits on foreign investors, according to data compiled by Bloomberg. The kingdom is the

Saudi Arabia may be added to MSCI’s emerging-markets gauge by 2017 at the earliest, Sebastien Lieblich, executive director at MSCI Index Research, said by phone from Geneva today. The nation may account for about 4 percent of the index, he said.

`More Mainstream'

“If you assume a neutral allocation to the market, and assuming the 4 percent that MSCI is guiding for, we will be talking about $40 billion” of foreign inflows in Saudi Arabia’s exchange, Dubai-based Rami Sidani, who oversees the $343 million Schroders International Selection Fund, said by telephone today.

The United Arab Emirates’ exchanges, along with Qatar’s, began trading as emerging markets last month after index provider MSCI reclassified them in June 2013.

“The move by Saudi Arabia helps accelerate efforts by the Gulf into becoming a more mainstream destination for international investors,” Ryan Huang, Singapore-based market strategist at IG Ltd., said by e-mail today. “Opening up the market will be a liquidity boost for Saudi corporations.”

Saudi Basic Industries Corp., the world’s biggest petrochemicals producer; Kingdom Holding Co., the investment vehicle of billionaire Prince Alwaleed bin Talal Al Saud; and Al Rajhi Bank, the largest Islamic lender, are all listed on the Tadawul. Sabic surged 6.7 percent to 123.35 riyals, the highest close since September 2008.
CMA Draft

The Tadawul has rallied 17 percent so far this year, compared with a 7.1 percent advance in the MSCI Emerging Markets Index and a 15 percent increase in the MSCI GCC Countries Index.

The CMA drafted a proposed set of rules for international investors more than a year ago, requiring a minimum $5 billion of assets under management and a five-year operating history. The rules, designed to limit speculative inflows, would also cap investment in local companies, a person with knowledge of the matter said in May.

At least three banks, including HSBC Holdings Plc and Deutsche Bank AG, have executed test trades, three people said, asking not to be identified as the plans are private. Access for money managers outside the GCC has so far been limited to indirect routes, including equity swaps and exchange-traded funds.

Mark Mobius, who oversees more than $40 billion as the executive chairman of Templeton Emerging Markets Group, said in November his firm could double or triple its investment in Saudi Arabia if authorities allow direct foreign access.
Economic Growth

The Saudi index trades at 14.8 times estimated earnings for the next 12 months, compared with 11.2 for the emerging-markets index and 15.1 for Dubai’s DFM General Index. Ten-day volatility in the Tadawul index tumbled to a decade low of 2.98 on July 17, data compiled by Bloomberg show, before rising to 15.6 today. By contrast, price swings in Dubai’s exchange rose to an almost five-year high in July.

Gross domestic product in Saudi Arabia will probably expand by 4.2 percent in 2014, versus 3.8 percent last year, economist estimates compiled by Bloomberg show.

Saudi to Open $531 Billion Stock Market to Foreigners - Bloomberg

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > Saudi to Open $531 Billion Stock Market to Foreigners

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
China Plan to Open Metal Futures to Foreigners to Help LME kbit News and Current Events 0 May 31st, 2012 03:26 PM
Apple’s Stock Surges to $500; Market Value Near $500 Billion Quick Summary News and Current Events 0 February 13th, 2012 10:10 AM
Facebook to File Wednesday For $5 Billion Stock Offering Quick Summary News and Current Events 4 February 1st, 2012 02:03 AM
AIG, US Treasury to Sell Nearly $9 Billion in Stock Quick Summary News and Current Events 0 May 11th, 2011 08:30 AM
Saudi Slashes Oil Output; Says Market Oversupplied Quick Summary News and Current Events 0 April 17th, 2011 09:10 PM

All times are GMT -4. The time now is 02:08 AM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-26 in 0.09 seconds with 19 queries on phoenix via your IP