UAE to benefit from Saudi financial markets opening to foreign investors

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uae Securities and Commodities Authority
UAE's Securities and Commodities Authority logo. Image - sca.gov.ae

The chief executive officer of the UAE’s Securities and Commodities Authority (SCA) said Saudi Arabia’s long awaited move to open up its financial markets to foreign investors will bring rewards to its Emirati counterparts.

Abdullah Al Turifi, the head of the SCA, the UAE markets watchdog, hoped Abu Dhabi and Dubai would be the biggest gainers from the emergence of Saudi Arabia as an international investment avenue. “What’s happening in Saudi Arabia will affect the UAE positively,” he said.

“Investors from abroad coming to invest in Saudi will look to diversify their investment across other markets in the region.”
Saudi regulators have announced that qualified international investors will be given “gradual” access to the kingdom’s listed companies in a move widely expected later this year, but declined to give a certain date.
According to financial analysts, foreign investors are set to pour billions into the market, with the minimum individual investment expected to be set at US$5 million.
Despite the fact that the financial markets in Abu Dhabi and Dubai are already open to foreign investment, the flow from outside the GCC is small with bourses not able to achieve the MSCI “emerging market” status yet.

The UAE SCA head also rubbished suggestions that opening up of the Saudi markets would drive investors away from the Emirates.

“We are not working in competition. I don’t think there’s any conflict,” he insisted.

SCA officials recently said they are overhauling regulations governing market activity in order to align themselves with international practices and attract more foreign-fund managers.

Al Turifi also announced his office would begin publishing new rules on margin trading, market-making and short selling next month, after several delays.

“The first will be out within a month or so, before the summer. On short selling before the end of the year hopefully. The financial markets have to get ready for them so we need to give them that time,” he said.

Source: The National

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