Saudi Arabia took steps towards opening the Kingdoms securities exchange to foreigners a year ago. This week it increased its efforts to keep pace with other proposed changes occurring throughout the Kingdom.
Hong Kong, May 25, 2016 — New principles controlling the activity of Qualified Economic Specialists (QES) could pull in more global funding to the US$400 billion Tadawul, as the Kingdom introduces auxiliary changes to recalibrate an economy that has been centered around oil production for almost a century.
Resources specialists attending a Euromoney meeting in Riyadh offered support for the changes which are underway as the Kingdom moves towards listing part of the greatest gem in its crown – Saudi Aramco.
Sheila Patel, the CEO of International Goldman Sachs Asset Management, said the changes addressed critical strides towards making the Kingdom more “investable”.
The transformation of the Tadawul is taking place against the backdrop of extraordinary plans for financial diversification as laid out in the Saudi Vision 2030, which was presented a month ago by the Saudi appointee crown ruler Mohammed bin Salman.
While the stock exchange looks to attract more international interest, it also needs to energize the listing of smaller organizations and plans to create a second market for this.
Supporting small and medium-sized ventures is a vital part of altering the structure of an economy that relies mostly on one product and one main employer – namely oil and oil producers.
Gary Chambers, Chief Investment Officer and Director of Corporate Trading at Fidea Wealth Management, says that guidelines stating which companies will be qualified to list their shares on the additional bourse were yet to be announced.
The developments in the Saudi stock market may influence different bourses in the area moving at various speeds, towards enhanced governance as perceived by index compilers, such as MSCI.
The opening up of new indexes increases the transparency of provincial organizations to those outside organizations who are seeking returns as well visibility.
Fidea Wealth Management