RIYADH: Foreign investment in companies quoted on the Saudi Stock Exchange (Tadawul) is gathering momentum, according to HSBC Saudi Arabia, a pioneering investment house.
In just six months since limited access to share trading in the Kingdom was granted to non-resident foreign institutions and individuals, HSBC Saudi Arabia has purchased over 100 million shares, valued at over SR4 billion on behalf of foreign clients.
“The pace of foreign investment in Saudi-quoted companies has been picking up noticeably over the period, despite various challenges and difficulties facing financial markets all over the world”, said Osama Shaker, managing director and head of investments at HSBC Saudi Arabia.
“The value and volume of purchase trades completed by HSBC Saudi Arabia for more than 30 prominent foreign-based investment institutions is a particularly significant achievement given depressed market conditions everywhere. This reflects both the confidence of investor institutions in the Saudi economy and the strength of our company and the excellent reputation it enjoys abroad,” he added.
The groundbreaking move last August by the Saudi government allows non-resident foreign investors (institutions or individuals) to trade Saudi companies’ shares listed on the Saudi Stock Exchange (Tadawul), through authorized persons, such as HSBC Saudi Arabia, which retain legal ownership of the shares. These arrangements are known as Swap agreements.
“The Capital Market Authority (CMA) has been continuously working on encouraging investment in the Saudi market and has judiciously used SWAP Agreements to gradually open the market to foreigners. HSBC is proud to have worked closely with the CMA to launch this product, which is now a popular means to provide indirect exposure to one of the more established global emerging markets,” Shaker said.