Saudi Arabia has several objectives to achieve by allowing eligible foreign financial institutions to invest in stocks listed on the Saudi stock market (Tadawul), says Mohammad bin Abdullah Al-Jadaan, chairman of the Capital Market Authority (CMA).

The most important of the objectives is to promote institutional investment and attract the specialized investors, and upgrade the level of research and studies on the stock market, he said in a media statement, according to a SPA report.

Since its inception, the authority is seeking to develop the capital market, Al-Jadaan said, adding that the decision to allow foreign investors is aimed at achieving a number of goals in short and long terms.

The goals include the market’s benefit from the expertise of specialized international investors, and promotion of the authority’s efforts toward increasing institutional investment, as well as encouragement of the listed corporations to improve the level of transparency, disclosure and governance practices.

On individuals whose financial institutions are licensed by the authority, the CMA chairman emphasized that this step will contribute to the growth of their business by serving this new segment of customers.

It will also result in increasing the activities of awareness and different specialized conferences on financial investment.

“Also, awareness in general about the financial market and investment in it will increase,” he added.

Al-Jadaan said opening the market for foreign investment does not focus on capital specifications or pumping cash because the local market does not suffer from scarcity, especially as the average trading value will remain within the accepted global averages.