Saudis to open stock exchange to international investors

Saudi shares climbed the most in 10 months after the country’s market regulator said it would open the Arab world’s biggest bourse to international investors by the middle of 2015. The Tadawul All Share Index rose 2 per cent to 9,940.11 this morning in Riyadh, the biggest jump since September.

Saudi Basic Industries, the world’s biggest petrochemicals producer, led the gains with a 5.3 per cent advance. Etihad Etisalat added 6 per cent, while Al Rajhi Bank climbed 1.8 per cent.

Saudi Arabia’s cabinet authorised overseas financial institutions to trade equities in the Tadawul and gave the Capital Market Authority scope to determine the timing, according to state-run Saudi Press Agency. The CMA is preparing to publish rules for qualified foreign financial institutions, it said in a statement on its website.

“International investors have been eager to accumulate blue chip stocks in Saudi for the longest time,” Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC, said. Many have a solid track record and are “uncorrelated to a certain extent to the global financial crisis,” he said. Sabic gained the most since October to 121.75 riyals.

Etihad Etisalat advanced the most since March 2011 to 88 riyals, the highest level in six weeks, and Al Rajhi rose to 67.50 riyals. The CMA said it will seek feedback on the rules from investors and the public for 90 days and will review responses by the end of the year.

Saudi’s exchange is currently limited to investors from the six-nation Gulf Cooperation Council.