Saudi Stock Exchange Tadawul All Shares Index

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Foreigners to be allowed to own up to 49% of listed securities

(1/10/2018 6:05:00 AM)

Saudi Arabia will lower minimum assets under management for qualified foreign institutions (QFIs) starting this month and will allow foreigners to own up to 49 percent of listed securities as it opens up its stock market and plans what could be the world’s biggest initial public offering.

The regulator raised the limit for a single qualified foreign investor in a company to 10 percent and set the ceiling for foreign holdings in all categories, whether resident or non-residents, at 49 percent, the Capital Market Authority (CMA) said in a statement on Tuesday.

In an initial proposal in 2014 that became effective the following year, the regulator had set a 5 percent limit for a QFI in a single company.

The CMA also lowered the level of assets under management or custody investors must have to 1.875 billion riyals ($500 million) from 3.75 billion riyals, saying it may reduce this further still.

That’s just one 10th of the initial proposal of 18.75 billion riyals. The formal approval of the new requirements, which take effect Jan. 23, affirms an amended draft proposal from November.

Saudi Arabia is opening up its stock market as it takes steps to wean the economy off oil. The government plans to create the world’s largest sovereign fund and sell hundreds of state assets in the process, including Saudi Arabian Oil Co., as well as stakes in the stock exchange, football club and flour mills.

Gulf News