Saudi bourse to ease rules for foreigners

Saudi Arabia's stock market regulator said today it would ease rules for foreign investment on the bourse, as part of efforts to open its capital market under an economic diversification plan.
Overseas institutions with at least 3.75 billion riyals (USD 1 billion) under management will now be able to invest on the Tadawul All-Shares Index (TASI), the largest Arab bourse, a notice on the exchange website said.
Under initial rules that applied last June when the TASI first opened to Qualified Foreign Investors (QFIs), at least 18.75 billion riyals in assets were required.
The regulator has also doubled the amount of a stock which QFIs may own, to a maximum of 10 percent of a listed company.

Government funds and university endowments will now be able to invest, adding to foreign banks, brokerage houses, fund managers and insurance companies that were permitted at the initial opening.
The effective date of the changes will be published in the first half of next year, the bourse statement said.

Saudi Arabia had long talked of diversifying its economy, which remained relatively closed to outsiders.
But the collapse in global crude prices by more than half since mid-2014 jolted the world's biggest oil exporter into accelerating those efforts.
At the root of the Vision 2030 diversification plan, unveiled last week by Deputy Crown Prince Mohammed bin Salman, is the sale of less than five percent of state oil giant Saudi Aramco in what officials say will be the world's largest-ever Initial Public Offering.

Proceeds from the sale will help create the biggest government investment fund in the world, with a value of USD 2 trillion, whose profits can provide an alternative to oil revenues.
The regulator aims "to make the financial market environment more stable and support the national economy and stimulate investment," the bourse statement said.
Today the TASI closed 1.2 per cent lower.