RIYADH, 12 May — The Saudi Cabinet will soon begin reviewing a bill to establish a public stock exchange to replace the existing interbank market, Finance Minister Ibrahim Al-Assaf was quoted yesterday as saying.
“The Cabinet will soon begin reviewing a draft bill on the stock exchange market after the ministry has completed it,” the Al-Eqtisadiah business daily reported the minister as saying.
The current market has a capitalization of more than $60 billion — the highest in the Arab world — and turnover hits several hundred million dollars weekly.
Assaf said the bill is part of an economic restructuring package that also includes new tax legislation, now before the Cabinet, and a bill on cooperative insurance that is under study in the Shoura Council.
Experts here believe the new step is aimed at meeting preconditions for gaining membership in the World Trade Organization (WTO), besides attracting foreign investment. The presence of a stock market is expected to boost transparency in share trading and to stop artificial price movements, they said.
Assaf said the government is determined more than ever to forge ahead with key economic and financial reforms despite a hike in oil prices and revenues.
“The direction of the state is very clear in this respect; reforms shall continue and their will be no hesitation after the rise in oil prices,” he said after meeting with IMF Managing Director Horst Koehler in Riyadh on Thursday.
Koehler, who is currently touring the region, discussed with Assaf economic reforms carried out by the Kingdom recently and urged Saudi officials to continue with the program. The development and energizing of the private sector come at the top of economic reforms, and the authorities have discussed a number of initiatives in this area, Assaf said.
Saudi Arabia, which is the world’s biggest oil supplier, has been opening up to foreign investment. In the past nine months it has approved more than $8 billion in foreign investment.
Assaf stressed that the Kingdom, which is a major contributor to the IMF and a member in its board of directors, has a significant role in drawing up the Fund’s policies. The Kingdom is keen on making the IMF’s policies helpful to the developing countries, he added.
