CMA to issue new investment rules

Updated 07 April 2015
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CMA to issue new investment rules

Mohammed Abdullah Aljadaan, chairman of the Capital Market Authority (CMA), summarized CMA’s last year performance and accomplishments as well as the initiatives it aims to achieve in the future, in his introductory speech in CMA’s annual report for the fiscal year 2014.
Aljadaan explained that one of the most important achievements last year was developing and approving CMA’s strategic plan for the five-year period (2015-2019). The plan includes 13 goals, which are broken down into four main strategic themes: foster capital market development, promote investor protection, improve the regulatory environment, and enhance CMA’s organizational excellence.
During the preparation of the strategic plan, the most important challenges to the capital market, its needs, other influential factors, as well as the views and comments of specialists at the CMA and those of market participants such as listed companies, authorized persons (APs) and investors have been studied and taken into consideration, he said.
As for CMA’s accomplishments during 2014, the chairman explained that it continued its efforts to develop and regulate the capital market by approving the Credit Rating Agencies Regulations, which would be implemented from Sept. 1.
In terms of strengthening disclosure and protecting investors, CMA’s board issued its resolution to suspend trading the shares of a listed company if the certified public accountant’s report on its preliminary or annual financial statements included a disclaimer of opinion or an adverse opinion and it will be lifted after removing the disclaimer of opinion or an adverse opinion from the financial reports.
The chairman said that CMA will issue the Rules for Qualified Foreign Financial Institutions Investment in Listed Shares and update the Investment Funds Regulations. The teams working on these two projects are reviewing and studying all the comments and observations received from the public and interested parties and are updating the regulations for approval.
On another note, 2014 witnessed an increase in the public offering of shares as its operations exceeded SR25.2 billion with 1185.9 percent increase from 2013. Total amounts raised from securities offerings reached SR69.1 billion up 15.3 percent from 2013.
As part of its continuous efforts to protect investors, CMA has started applying its board’s resolution to adopt the instructions and procedures related to listed companies with accumulated losses reaching 50 percent or more of its capital. By the end of 2014, the number of companies with accumulated losses reached 12 companies, of which four companies had accumulated losses of 75 percent or more of its capital.
Aljadaan pointed out that CMA last year continued to monitor websites and social media networks using the latest monitoring tools to detect violations of the Capital Market Law and its implementing regulations.
CMA recorded an increase in alerts on irregularities in the electronic media, which increased by 23 percent from 2013. This caused CMA to increase its efforts to intensively search these mediums, and such efforts rose by 66.6 percent from 2013.
CMA also continued its cause and cycle inspection visits on Authorized Persons (APs). The number of licenses covered by inspections in 2014 totaled 161 licenses pertaining to 56 APs.
As part of its endeavors to overcome difficulties that may face complainants, CMA has provided a set of channels for receiving complaints. The complaints handled by CMA are classified based on their nature and process.
CMA resolved 485 complaints in 2014, up 39 percent from 2013. It also prepared notifications/notices for 112 complaints it received to enable complainants to file their complaints to the Appeal Committee for the Resolution of Securities Disputes (ACRSD).
Aljadaan concluded by thanking Custodian of the Two Holy Mosques King Salman, Crown Prince Muqrin and deputy premier, Prince Mohammed Naif, deputy crown prince, second deputy premier and minister of interior, and Prince Mohammed bin Salman, minister of defense, president of the royal court and special adviser to the king for their support and care.


World’s biggest sovereign fund worried about trade wars

Updated 49 min 35 sec ago
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World’s biggest sovereign fund worried about trade wars

  • The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter
  • Markets are worried about a trade dispute between the United States and China

OSLO: The managers of Norway’s sovereign wealth fund, the world’s biggest, expressed concern Tuesday about global trade tensions, which could heavily impact its value.
The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter, helping erase a loss of 171 billion kroner in January-March that was attributed to a volatile stock market.
The Government Pension Fund Global, which saw its total value swell to 8.33 trillion kroner by the end of June, manages the country’s oil revenues in order to finance Norway’s generous welfare state when its oil and gas wells run dry.
But Norway’s central bank, which runs the fund, said geopolitical and trade tensions presented a risk.
“It’s fair to say that increased trade barriers or even trade wars will not be beneficial for the fund as a long-term global investor,” Trond Grande, the deputy chief of Norges Bank Investment Management, told reporters.
Markets are worried about a trade dispute between the United States and China. Accusing Beijing of unfair competition, the US administration is considering slapping a new round of levies worth $200 billion on Chinese goods.
Talks between the two slated for Wednesday and Thursday aimed at resolving the dispute have however eased concerns somewhat.
Following US-Turkey tensions that sent the Turkish lira and the Istanbul stock market tumbling, the Norwegian fund said its assets there were worth less than the 23 billion kroner they were at the beginning of the year.
“We’ve seen the market rise for a long time, that there are different political and geopolitical events in the world that can affect the market, and we have to be prepared for the fact that (the value of) the fund can go down a lot,” Grande concluded.
The fund’s strong second quarter was attributed primarily to its share portfolio, which accounts for 66.8 percent of its investments and which rose by 2.7 percent.
Real estate holdings, which account for 2.6 percent of its holdings, rose by 1.9 percent, while bond investments, which represent 30.6 percent, remained flat.
Faced with falling oil revenues in recent years, the Norwegian government has been tapping the fund to finance public spending since 2015. But with oil prices recovering, the fund registered its first inflow in three years in June.