Developing World Healthcare Blog

Saudi Arabia Stock Market Potentially Opening Wider

Saudi Arabia opened the Saudi Stock Exchange (or Tadawul) to foreign investors (with $5 billion under management) in June. Previously, foreign investment firms used swaps to invest in the market. At the time, the Financial Times reported that Tadawul’s market cap was about the same size as the other five Gulf states combined. Since then, eleven firms have received approval to enter the market. Investment flows into the market have been modest so far, reflecting the slow pace of approvals (BlackRock’s approval was announced on October 6) and the negative impact of lower oil prices.

 

More recently (several days ago) the Capital Market Authority’s Chairman disclosed that it is considering allowing foreign investment firms with less than $5 billion to enter the market. This action (depending on the requirements) would be a significant step forward. Saudi Arabia has a handful of listed healthcare companies (see our post from December 2014), and a healthcare system that has not kept pace with the country’s wealth. 

 

Additional openings of stock markets in emerging and frontier markets is one of the underpinnings of our investment thesis, so we hope for the best..........