Saudi Arabia’s Capital Market Authority announced on Monday it will allow subscription rights for share offers to be listed and traded on the Saudi stock market, as part of its drive to modernise the market while it prepares foreign investors’ entry in the market.
“This framework aims to add further protection and flexibility to those investors that do not have the intention to subscribe to their entitlements,” the Saudi stock market regulator said in a statement.
Abdulhamid Abu Dahesh, a Saudi financial adviser, said the announcement is a step forward and that the new framework was developed in accordance with the stock markets in Europe.
Saudi Arabia financial authorities insist they are making preparations to open its stock market, the largest in the Arab world, to direct investment by foreign institutions. However, they are reluctant to give a date for the reform apparently because they are concerned about the possible destabilisation of the market.