The Tadawul index has dropped 6.6% this year

Bloomberg
Riyadh


Saudi Arabia may soften the rules for foreigners seeking to own stocks in the kingdom as the country aims to boost liquidity on the Arab world’s biggest bourse.
The Capital Market Authority is studying the possibility of allowing institutional foreign money managers with less than 18.75bn riyals ($5bn) under management to own shares in the country, chairman Mohammed al-Jadaan said at a press event in Riyadh on Wednesday. The regulator is also considering changing rules around initial public offerings to help boost the number of institutional investors in the market, he said.
Opec’s biggest oil exporter is gradually removing barriers to one of the world’s most-restricted major stock exchanges as it seeks to diversify its economy away from energy. Since opening the market to direct foreign investment in June - subject to strict rules - 11 overseas investors have applied for and received licenses, al-Jadaan said.
The CMA is also studying the introduction of other products like real-estate investment funds, al-Jadaan said, and it will announce “very ambitious strategies” in the future. Investment flows into Saudi equities since the market opened to foreigners has been muted so far. Investors with a QFI licence bought stocks valued at 8mn riyals in July, according to data on the stock exchange website. On average, investors cumulatively traded about 4.8bn riyals per day that month, according to data compiled by Bloomberg.
The Tadawul All Share Index has dropped 6.6% this year.