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Investors to flock to KSA’s newly opened stock market

August 2015

In June, Saudi Arabia’s USD 530bn Tadawul stock exchange opened its doors to foreign investors for the first time, a move signifying the maturing of the Saudi financial system.

According to JLL it is one of the last major global stock markets to open up to foreign investors. The Middle East’s biggest economy now allows direct market access to large overseas investors that have been in existence for five years or longer and have more than USD 5bn in assets under management.

Of the 170 companies listed in the Tadawul all share index (TASI), just eight are real estate developers, yet the industry has been one of the market’s strongest performing sectors over the past year, recording a growth of around 20% (Y-O-Y).

“While the opening of the market to foreign investors has not had an immediate significant impact, we are likely to see an increase in capital flowing into the market over time,” said Jamil Ghaznawi, head of Saudi Arabia for JLL.

“Although increased liquidity will prove to be positive for listed real estate developers, the market is likely to remain dominated by private companies and high net-worth individuals in the short term,” said Ghaznawi.