Saudi Arabia's move to open to foreign investors 'to boost UAE'

UAE financial markets are likely to reap their own rewards when Saudi Arabia finally makes the long awaited move to open up to foreign investors, the chief executive officer of the Securities and Commodities Authority said.

Financial markets in the Emirates are likely to reap their own rewards when Saudi Arabia finally makes its long awaited move to open up to foreign investors, said the chief executive officer of the UAE's Securities and Commodities Authority (SCA).

Qualified international investors will be given "gradual" access to the kingdom's listed companies in a move widely expected later this year, although the Saudi regulator has declined to pinpoint a date.

Foreign institutional investors are poised to pour billions into the market, according to analysts, with the minimum individual investment expected to be set at US$5 million (Dh18.3m).

Abdullah Al Turifi, the head of the SCA, the UAE markets watchdog, said Abu Dhabi and Dubai would gain a separate windfall from the emergence of Saudi Arabia on to the international investment scene. "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."

Financial markets in Dubai and Abu Dhabi are already open to foreign investment, although the flow from outside the GCC is small, and the bourses have so far failed to achieve MSCI "emerging market" status.

Mr Al Turifi dismissed suggestions that opening up the Saudi market would draw investors away from the Emirates.

"Absolutely not. We are not working in competition. I don't think there's any conflict," he said.

The SCA is overhauling the regulations governing market activity in a bid to align with international practices and attract more foreign-fund managers.

Mr Al Turifi said 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.

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