The Saudi stock exchange (Tadawul), which is now open to international investors, has planned to showcase the significant opportunities it holds in different parts of the world. It will organize a series of road shows in Singapore, London, New York and other key financial centers later this year.

Tadawul, which has a market capitalization of $590 billion and remains the biggest in the Middle East, has just opened to qualified foreign investors (QFI) for the first time.

Saudi Arabia represents approximately 50 percent of the $1.6 trillion Gulf economy and is the 19th largest economy in the world. For international investors, the opening of the Saudi stock exchange represents an opportunity to gain access to one of the largest emerging and growing ones in the world.

According to Tadawul website, Adel Al-Ghamdi, CEO of the Saudi stock exchange, said: “We are excited to welcome foreign investors to our exchange. This is an important move and considered next step in a long journey that will continue the development of the exchange, enhance governance among listed businesses and improve research and knowledge in the market.”

The opening of Tadawul, which has created a transparent market in which QFIs can invest with confidence, has come at a time when the affiliate members of the International Organisation of Securities Commissions (IOSCO) are in London to attend their 40th annual meeting and conference.

Represented by Al-Ghamdi, the Saudi stock exchange is attending the event alongside other leading exchanges and regulators to discuss developments in capital markets around the world.

Tazeem Anwar, financial analyst at Zughaibi & Kabbani Financial Consultants, told Arab News: "The road shows may provide a unique opportunity for the Saudi stock market to exchange investment ideas and to spur foreign investors."

The Tadawul All-Share Index closed 0.39 percent down at 9,505.74 points on Thursday. The value of traded shares reached SR3.80 billion.

The latest stock exchange data showed foreign institutions made no significant investments on Wednesday. According to Reuters’ calculations based on the data, foreigners in total bought a mere $3 million of local stocks directly between Monday and Wednesday, although some additional inflows may not have been registered in the data because they were too small.

Only one institution, HSBC, has so far publicly announced that it obtained a license to invest directly from the Kingdom's Capital Market Authority.

Bernard Caralp, chief investment officer at SEDCO Capital, said: “The opening of Tadawul to qualified foreign investors will be more than just an inflow of liquidity as it will give international investors direct access to the Middle East’s biggest economies, with listings of some of its largest companies across industry sectors and, to this extent, they will be able to access a stock market that is more representative of the real economy than many of its regional peers.”

He added: “In a domestic context, qualified foreign investors will help the Saudi stock market improve its functioning in several ways as local companies will be exposed to a much needed market discipline and support for their intrinsic growth, given the intended diversification of the country’s petrodollar-dependent economy. Long-term investors will also reap the benefits of a greater institutionalization of the market, which will reduce volatility and speculation in the market resulting in a larger share of long-term savings being allocated to the equity markets,” he added.