27 July 2016
RIYADH -- The Capital Market Authority (CMA) is reportedly accelerating efforts to further ease restrictions on foreign investors.

The Saudi market regulator in May announced plans to allow foreign investors to own larger stakes in listed companies as part of new regulations it expected to implement by mid-2017.

But in an interview given to The Wall Street Journal this week, CMA Chairman Mohammed Al-Jadaan hinted at the possibility of implementing the decision this year instead of June 2017 as announced earlier.

"It might be in this year," he said, adding that public consultation on the proposed changes concluded last week, and the new rules could be published by the end of September.

Those amended rules include lowering the minimum value of assets foreign institutions are required to manage to qualify to invest in the Saudi stock market. The stock market also intends to move away from a same-day trading settlement system to instead clear trades within two working days, which foreign investors prefer.

In June 2015, the Kingdom allowed international institutional investors to buy local equity, a move that would potentially help the Kingdom attract more foreign capital and reduce its dependence on oil revenues.

Saudi Arabia plans to list up to 5% of its state-owned company on global stock exchanges, including, its main bourse at home. It estimates that Saudi Aramco is worth between $2 trillion and $3 trillion, which means the initial public offering could potentially raise $100 billion to $150 billion.

"It (Aramco) will call attention. If they are focusing on the Saudi market, they will then look at other assets," the newspaper quoted Al-Jadaan as saying.

"We want to make sure the whole ecosystem is prepared for it," he said, adding, "We will be thrilled to have Aramco come to the market. It's something we would proud of, but we also want to make sure that we are ready."

"It's (Aramco IPO) going to be a huge amount and it's unlikely that local demand will cover it, so you'll be looking for international cover. And you want to make sure that the international demand process is prepared," he said.

© The Saudi Gazette 2016