Saudi Arabia may give foreigners leeway to invest in stocks



Saudi Arabia may allow foreigners to invest directly in stocks in the next year, said John Burbank, founder of the US$3.7 billion hedge fund Passport Capital LLC.

"The place that we probably have by far the biggest weight relative to other people would be Saudi Arabia, which is our favorite emerging market," Mr Burbank said. Passport has about 17 per cent of its capital invested in the Arab world's largest bourse. "We think the market's going to open up in the next year."

Direct foreign investment in Saudi stocks would attract $25bn to $30n in inflows, Mr Burbank said. The kingdom, which said it will open the market gradually, allows non-resident foreigners to invest in shares through equity swaps and exchange-traded funds. Foreigners account for about 2 per cent of investments in the bourse, Mr Burbank said.

Investors are seeking access to Saudi Arabia as the government pursues a spending plan of more than $500bn in an effort to boost the non-oil economy. MSCI, whose gauges are tracked by investors managing $7 trillion, last year resumed Saudi coverage and said it would consider including the nation in frontier or emerging market indexes if it allows direct access to foreigners.

"What we're interested in is the domestic economy," said Mr Burbank, whose $1.3bn Passport Global fund rose about 3.4 per cent in January, according to a performance update to investors obtained by Bloomberg. "The kingdom is taking in so much revenue and redirecting it now into the domestic economy."

Saudi Arabia's economy grew 6.8 per cent last year after raising its 2013 expenditure target by almost a fifth to a record 820bn Saudi riyals. That beat the 5.6 per cent median estimate of 16 analysts compiled by Bloomberg. The growth rate is "pretty extraordinary in these times," Mr Burbank said.

Saudi Arabia's stock exchange has a market capitalization of 1.44tn riyals, compared with $120bn for gauges in the United Arab Emirates and $308bn for Turkey, according to data compiled by Bloomberg. Saudi stocks have a dividend yield of 3.5 per cent, compared with 2.7 per cent for the MSCI Emerging Markets Index.

Petrochemicals stocks in the kingdom are attractive given high margins, Mr Burbank said, without specifying which companies Passport is invested in. Saudi Basic Industries Corp, the world's biggest petrochemicals company, is poised to report a 15 per cent increase in 2013 profit, according to the average estimate of 14 analysts compiled by Bloomberg.

* Bloomberg News

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

'Skin'

Dir: Guy Nattiv

Starring: Jamie Bell, Danielle McDonald, Bill Camp, Vera Farmiga

Rating: 3.5/5 stars

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

What She Ate: Six Remarkable Women & the Food That Tells Their Stories
Laura Shapiro
Fourth Estate

Pros and cons of BNPL

Pros

  • Easy to use and require less rigorous credit checks than traditional credit options
  • Offers the ability to spread the cost of purchases over time, often interest-free
  • Convenient and can be integrated directly into the checkout process, useful for online shopping
  • Helps facilitate cash flow planning when used wisely

Cons

  • The ease of making purchases can lead to overspending and accumulation of debt
  • Missing payments can result in hefty fees and, in some cases, high interest rates after an initial interest-free period
  • Failure to make payments can impact credit score negatively
  • Refunds can be complicated and delayed

Courtesy: Carol Glynn

The 12 breakaway clubs

England

Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur

Italy
AC Milan, Inter Milan, Juventus

Spain
Atletico Madrid, Barcelona, Real Madrid

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

SPECS

Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Day 3 stumps

New Zealand 153 & 249
Pakistan 227 & 37-0 (target 176)

Pakistan require another 139 runs with 10 wickets remaining

Director: Nag Ashwin

Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★


Latest
Most Read
Top Videos

Energy This Week

Expert analysis on oil & gas renewables and clean energy

      By signing up, I agree to The National's privacy policy
      Energy This Week