IslamicFinance.de

The Capital Market Authority is finalizing a regulatory framework which will allow foreigners to directly own stocks in Saudi Arabia, though the market has no need for liquidity from international investors. Foreign investment is attracted to come to the market for the technical expertise and human capacity. Indications are that foreign appetite is strong to invest in the largest regional exchange, which could add greater depth and breadth to the market and ultimately benefit all participants, Furthermore, large institutional investors could push for greater disclosures and transparency which will pave the way for Saudi equities to be included in widely followed emerging markets indices. Following this, the next steps would be the introduction of new instruments such as REITs, options and warrants, and covered shorts. An efficient and well-regulated market should be the eventual goal.

The Saudi Capital Market Authority (CMA) has said the number of real estate investment funds in the kingdom has so far reached 58 funds and there has been tremendous turnout among real estate developers and investors to float more funds. The market regulator has issued guidelines to regulate investments in this sector to avoid non-organised real estate investment, which has had a negative impact on many citizens in a bid to streamline group investment on the real estate sector and allow investors, especially young and small categories.