The Saudi Stock Exchange, or Tadawul, opened its doors to direct investment by foreign institutional investors on June 15.
There has, however, been neither a rapid nor large increase in trading volume. Quite apart from both low oil prices and continuing concerns about stability in the Middle East, prospective participants have had to grapple with difficult legal issues and reams of complex paperwork.
That said, when they do finally arrive, qualified foreign investors will find themselves in a big, liquid and important market for emerging markets investors. Perhaps then, as the exchange’s CEO hopes, their presence will not only enhance research and market sophistication, but also improve corporate governance amongst companies listed on the exchange.
Only time will tell.
Tadawul Participation: Purchases in July 2015 - % Value (SAR)
Source: Saudi Stock Exchange (Tadawul)
Note: GCC = Gulf Cooperation Council, QFI = Qualified Foreign Investor, and data for July 2015
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