Saudi Arabia opens up to foreign investors
Foreign investors can now trade in Saudi Arabian stocks, but accessing the market still isn't easy.
The Saudi Arabian stock exchange bigger than the main markets in Russia and Mexico and the emerging world's seventh largest finally opened its doors to foreign investors this week. The market, worth $560bn, has easily outperformed the MSCI Emerging Markets index this year, with a rise of 15%, compared to 2.5%.
What the commentators said
Nonetheless, investors "are not quite queuing around the bourse". The slow start is partly due to the tight rules one of which demands that investors manage at least $5bn in assets to gain entry. Foreigners may not own more than 49% of a company, and trades must be settled immediately, which is a hassle for brokers and investors, said Philip Stafford on ft.com.
Still, "this is just the beginning". Local authorities want to open up gradually and avoid overheating the market. They will lengthen settlement times soon.
All this mirrors the early days of the Hong Kong-Shanghai Stock Connect programme, allowing foreigners access to mainland China. After a slow start, it has made "eye-catching" progress.