IslamicFinance.de

The CMA announced on Monday rules allowing foreign institutions to begin investing directly in the stock market, subject to restrictions such as a 10 percent cap on combined foreign ownership of the market. On the other hand, foreigners will be allowed to buy directly into initial public offers of shares in Saudi Arabian companies on a case-by-case basis. IPOs are a special matter because they are usually priced in Saudi Arabia well below market value, as a way to spread the kingdom's oil wealth among its citizens. Letting foreign investors buy directly into the offers could be politically sensitive.