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Abu Dhabi, UAESaturday 23 June 2018

Riyadh to give foreign investors full access to Nomu secondary market

Saudi Capital Market Authority aims to put in place new rules to make the listing of stocks and debt instruments easier

The three-day Future Investment Initiatives conference in Riyadh is playing host to A-list investors and business leaders. fayez Nureldine/AFP
The three-day Future Investment Initiatives conference in Riyadh is playing host to A-list investors and business leaders. fayez Nureldine/AFP

The Saudi Capital Market Authority (CMA) plans to give foreign investors complete access to Saudi Arabia's Nomu, the secondary market, starting from January 1, the CMA's chairman said on Thursday.

Saudi Arabia has now more than 100 qualified foreign institutional investors, of which in excess of 20 per cent registered in the past month, Mohammed El Kuwaiz said.

Foreign investors in Nomu will no longer have to meet requirements to qualify as foreign institutional investors, but will have to continue to obey limits on foreign ownership of stocks, said the chairman.

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The CMA aims to put in place new rules to make the listing of stocks and debt instruments easier, he added.

As to new listings, around five to six initial public offerings are currently being reviewed by the authority, El Kuwaiz said.

When asked about the Aramco IPO, Mr El Kuwaiz said that foreign investors could participate in IPOs within Saudi Arabia. Saudi authorities have said Aramco would be listed on both the Saudi stock exchange, the Tadawul, and on one or more international exchanges.

During the same investment conference in Riyadh this week, the chief executive of the Tadawul said the Saudi stock exchange could absorb the entirety of Saudi Aramco's IPO.

Meawhile, Saudi Arabia is working to sell more of its international bonds in Asia to secure a diverse, stable investor base, and aims to avoid excessive short-term speculation in the bonds, the head of the kingdom's debt management office said on Thursday.

Riyadh began issuing international sovereign bonds in October last year and made its third issue last month, selling US$12.5 billion of debt.

Fahad Al Saif told the investment conference that the kingdom had made good progress in placing its bonds with US and European investors, and was now talking with Asian institutional investors to increase demand there.

He also said Saudi Arabia was distinguishing between long-term, stable investors and those who simply wanted to buy and trade. "We know who the flippers are," he said.

The news comes amid Saudi Arabia's ambitious plans for economic and social renewal presented before a host of A-list global investors at the Future Investment Initiatives conference in Riyadh, saying its main sovereign wealth fund wants to increase its financial clout to 1.5 trillion Saudi riyals (Dh1. 46tn) by 2020.

The Public Investment Fund (PIF) announced the assets-under-management goal at a conference showcasing a programme to turn the country into a high-tech business hub with a lifestyle free of extremism.

PIF published its first comprehensive business programme, outlining targets for investments and returns for 2018-2020, under reforms to boost private-sector growth and wean the largest Arab economy off oil export dependence.