Saudi Arabia to Open Stock Market to Global Investors
Saudi Arabia is set to open its stock market to global investors, with plans to scrap the Qualified Foreign Investor (QFI) program and increase foreign ownership limits. This follows a decade of gradual easing of restrictions to attract foreign capital.
The Capital Market Authority (CMA) is consulting on removing the QFI program and a swap program, which allowed foreigners to indirectly access the stock market today. Around 4,500 QFIs, including major fund managers like BlackRock and JPMorgan Asset Management, are currently registered on the Saudi exchange.
The stock market today reacted calmly to the QFI consultation, unlike the buying spree triggered by the potential lifting of foreign ownership limits. The CMA aims to attract 'greater flows of foreign capital' and has hinted at further measures to increase international participation in the stock market. Saudi Arabia is preparing to lift restrictions on foreign investors buying local stocks on the Tadawul exchange.
Once the rules are finalized, anyone around the world will be able to quickly start investing in the Saudi stock market. The next step after removing the QFI regime is expected to be changes to foreign ownership limits, currently capped at 49%.
Saudi Arabia is poised to welcome a wave of international investors, with the removal of the QFI program and potential increase in foreign ownership limits. This move is expected to boost the Saudi stock market and attract more global players, following a pipeline of 14 companies lined up to list in the second half of the year.
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