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Saudi Stock Market CEO: No Timeline For Opening Up To Foreigners

Sunday, May 27, 2012

(This story was originally published Saturday)

--Saudi stock market does not have timeline for opening up to foreigners, CEO says

--Saudi market planned move for improved quality rather than liquidity

--Saudi stock market CEO says no date yet for IPO

By Summer Said

Of ZAWYA DOW JONES

RIYADH (Zawya Dow Jones)--Saudi Arabia's stock market, known as Tadawul, doesn't have a timeline for opening up to foreign investors, its chief executive said Saturday.

"To be brief and precise, there is no timeline for opening the market," Abdullah Suweilmy told an event in Riyadh.

"There has been a lot of talks about this issue and it is being considered but there is nothing definite yet," he said, adding that the move is aimed at improving the quality of the market rather than attracting more liquidity.

Suweilmy also said Tadawul hasn't decided on a date for its planned initial public offering.

Saudi Arabia--the largest, most liquid and yet least accessible market in the Arab world--is considering opening its stock market to foreign investors in a move that could help erode the dominance of local retail investors and turn the local market into a regional trading hub. But when the kingdom will make its final decision on this bold proposal, which could earn Saudi Arabia the much-coveted MSCI frontier market status, remains uncertain.

The Capital Market Authority's chairman Abdulrahman al-Tuwaijri said last month that the kingdom plans to open its stock market to foreign investors but will only do so gradually, as it wants to ensure its planned move wouldn't affect the market's stability.

The CMA has already taken small steps to partially open up the market. After allowing access indirectly through the use of swaps in August 2008, it decided to open the market to cross-listing by qualified foreign firms in January this year.

Last month, CMA said it has singed an agreement allowing widely followed index compiler MSCI Inc. (MSCI) to use stock market data to create and issue indexes on the kingdom's equity market, almost three years after negotiations failed between the two parties.

MSCI will reintroduce coverage of the Saudi equity market with the release of standalone country indexes. MSCI will also reintroduce the MSCI GCC Countries Index (MSCI GCC Countries ex Saudi Arabia Index and MSCI Saudi Arabia Domestic Index) and the MSCI Arabian Markets Index (MSCI Arabian Markets ex Saudi Arabia Index and MSCI Saudi Arabia Domestic Index), as well as domestic versions of existing regional indexes.

MSCI will make the MSCI Saudi Arabia Domestic Indexes, and related regional indexes, available in June 2012.

The widely tracked and influential index provider said in 2009 that it would drop all indexes with Saudi stocks after failed negotiations with the kingdom's bourse, better known as Tadawul, over the licensing of information.

-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com; Twitter: @ZDJnews

(END) Dow Jones Newswires

27-05-12 0356GMT

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