The Saudi Arabian stock exchange market, the Tadawul, has risen to six year highs on the back of an announcement that the exchange is set to open its doors to foreign investors. Taking direction from the Council of Ministers in the Kingdom of Saudi Arabia, the Capital Market Authority (CMA) said that "The market will be open to eligible foreign financial institutions to invest in listed shares during the first half of 2015, with God's permission.”
The opening of the Saudi market, capitalized at about $530 billion, is one of the most keenly awaited economic reforms in the largest oil exporting nation. The bourse would be one of the world's last major exchanges to begin welcoming foreign money. To date, foreigners have had to access the market via participatory notes, commonly known as P notes. The development has been widely viewed as hugely significant, given that Saudi Arabia is by far the biggest Middle Eastern market, with more than 165 stocks and trading up to $4 billion per day.
After the completion of statutory procedures, the CMA will work on the publication of the draft of The Rules for Qualified Foreign Financial Institutions’ Investment in Listed Shares which should be available within the next 6 weeks. This will enable concerned and interested parties to provide their feedbacks on the regulation for a period of 90 days after publication for consultation. CMA will review all comments and observations by the end of this year and it will check the readiness of the Saudi Stock Exchange (Tadawul). In addition, CMA will coordinate with the relevant government parties prior to the adoption of these rules.