Saudi Arabia opens up to foreign investors

Foreign investors can now trade in Saudi Arabian stocks, but accessing the market still isn't easy.

15-6-18-Saudi-634
Saudi Arabia may be opening up, but investing 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.

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Five online retail stocks to diversify your portfolio with
Share tips

Five online retail stocks to diversify your portfolio with

Professional investor Tancredi Cordero, founder and CEO of Kuros Associates, selects five of his favourite online retail stocks to buy now.
18 Jan 2021
Why investment forecasting is futile
Investment gurus

Why investment forecasting is futile

Every year events prove that forecasting is futile and 2020 was no exception, says Bill Miller, chairman and chief investment officer of Miller Value …
18 Jan 2021

Most Popular

Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Bitcoin: fool’s gold or the new gold?
Bitcoin

Bitcoin: fool’s gold or the new gold?

With bitcoin hitting new highs last week, and close to becoming a mainstream investment, is it really gold for the 21st century?
15 Jan 2021