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Saudi CMA considers relaxing ownership limits for foreign strategic investors

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Currently foreigners own five per cent of Saudi equities.

Sunday 28, April 2019 BY KUDAKWASHE MUZORIWA

The Chairman of Saudi Arabia’s Capital Market Authority (CMA) said that the regulator is considering relaxing a 49 per cent limit for foreign strategic investors in shares of listed companies due to increased demand, according to local newswire, Saudi Press Agency.

Mohammed El Kuwaiz, the Chairman of Saudi Arabia’s CMA, said that foreigners currently own 5.5 per cent of Saudi equities but that could nearly double by the end of 2020.

The Kingdom has introduced a number of reforms in recent years, winning endorsements from MSCI and FTSE Russell, as it seeks to position Tadawul as an international capital markets hub.

Additionally, local shares were incorporated into the FTSE Emerging-Market Index in March and will join the MSCI Emerging Market benchmark later this year.

An upcoming initial public offering (IPO) by Fawaz Alhokair Group’s Arabian Centres Company, will be the first offering in the Kingdom under Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the US.

Last week the CMA, the Tadawul and the Kingdom’s Debt Management Office (DMO) announced a reduction in fees and commissions to encourage secondary market trading of debt.

The three entities said trading commissions for the Tadawul and the CMA was reduced, while fees for new offerings and annual registration charges for issuers were also reduced.

Similarly, the DMO also reduced the par value for government-issued Sukuk from SAR 1 million to SAR 1000, signalling further government efforts to facilitate access to the bond market for retail investors.

 

 

 

 

 

TAGS : Tadawul, CMA, MSCI EM Index, FTSE , Debt Management Office, Fawaz Alhokair Group, Arabian Centres, IPO

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