Saudi Arabia is the country with the second most oil reserves in the world and it has the most dominant stock exchange in the six-country Gulf Cooperation Council (GCC). Despite falling oil prices and King Abdullah’s death in 2015, the Saudi Stock Exchange, or Tadawul, managed to show recovery in the months that followed.
Tadawul permits only established institutional foreign investors and not individual investors. According to the CMA, a “qualified foreign investor” who wants to participate in the Saudi Stock Exchange must have at least $5 billion in assets under their management and have been in business for at least five years.
Other stipulations include:
- Foreign investors can are limited to five percent of issued shares in any one company.
- All foreign investors (which includes resident, non-resident, swaps, and "qualified foreign investors") can own up to a maximum of 49 percent of any one company's shares.
- All "qualified foreign investors" together are limited to 20 percent a single company's shares and 10 percent of the aggregate (all listed companies) stock market value.
How to Invest
Morgan Stanley (MS) and Credit Suisse Group (CS) are among the global banks that have set up offices in Riyadh, which acts as a hub for brokers covering the GCC region. Thus, it is likely qualified foreign investors will use the same investment banks for their entry in the Saudi stock market.