DUBAI: Foreigners are becoming increasingly excited after a top financial expert in the Middle East said he believed Saudi Arabia would soon open its stock market to foreign investors. Speaking to Reuters news agency, Deutsche Bank's head of MENA equities said that the move into the region's largest bourse would allow international capital to own their own shares on the exchange and boost investment. “I do see it happening very soon,” Ahmed Beydoun told Reuters in a telephone interview. “The Saudis have been very vocal in the last month on that and their desire to be included in MSCI. They say they would like to open up but all the factors have to be considered.” The move would end the swap arrangements being made between foreign investors and local companies, where licensing is done through intermediaries. The Saudi market has a value of some $325 billion through September and is one of the strongest local markets in the world. Foreign investors have long hoped the government would open trading to an international audience. “We are very hopeful that this will go through and we will be able to start investing and improving the overall investment nature of the Saudi Arabia,” said one top business investor in Cairo. The investor told Bikyamasr.com that “through this sort of opening, it will improve both local investment and financial capacity as well as make Saudi an even more popular market destination.” Saudi currently has no classification within the influential MSCI indices, but its size would likely gain it emerging market status if it were to join. Market estimates put the kingdom's potential weighting at 2.5 to 3 per cent, which would be around double Turkey's current position. Both Qatar and the United Arab Emirates are awaiting a December decision by MSCI on whether to upgrade them from frontier to emerging market status and Beydoun is positive towards their chances. BM
