Saudi Arabia is planning to allow non-resident foreign investors to own strategic stakes in listed companies’ share capital.
The Saudi Capital Market Authority (CMA) and the Saudi Arabian General Investment Authority (SAGIA) have signed a Memorandum of Cooperation to set up a collaborative framework to be followed by the CMA and SAGIA when preparing the regulatory directives for allowing non-resident strategic foreign investors to have a 10% or more stake in a public company. Investors will also have voting rights.
However, the directives will exclude some specific sectors that prohibit such an ownership by law.
The Saudi Arabian Stock Exchange opens the country's markets, including shares of key companies such as Saudi Arabian Oil Co. This happens in the framework of nationwide reforms designed to reduce the country's dependence on oil revenues.
In June, index provider MSCI announced that it will include the MSCI Saudi Arabia Index in its 2018 Annual Market Classification Review for a potential inclusion in the MSCI Emerging Markets Index.
Saudi Arabia's domestic stock exchange, known as the Tadawul, has a total market capitalization of about $440 billion, making it the largest among the Arab countries.
The government issued 87 licenses for investment projects in the kingdom in the third quarter, up more than 60% from the same period last year. In April-June, 85 licenses were issued.