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Saudi Arabia opens its stock market for foreigners

img_0140Saudi Arabia aims to allow direct foreign ownership of shares next year, a long awaited reform aiming to help diversify the oil-rich kingdom’s economy away from hydrocarbons. In a statement, the Capital Markets Authority said foreigners would be allowed to invest in listed shares during the first half of 2015. The move, mooted for years, has been delayed amid concerns that foreign ownership of large Saudi companies, which benefit from the public spending generated by the country’s huge oil revenues, would come at the expense of Saudi nationals.The reform, when implemented, should spark interest from global asset managers interested in exposure to the Gulf’s economic powerhouse, whose Tadawul stock market has a capitalization of around $530 billion. Foreigners have been able to gain indirect exposure to Saudi stocks via swaps and exchange traded funds, but overseas firms have been anticipating the benefit of direct access.

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