Saudi Tadawul and Abu Dhabi bourse in cross-listing accord

Saudi Arabia’s stock market, the most liquid in the region with more than US$1.3 billion traded daily, has been considering a wider opening of its market for several years.

Saudi Tadawul's agreement with the Abu Dhabi bourse is the first among GCC exchanges since the kingdom passed a legislation last year. Above, a broker monitors stock prices in Riyadh. Faisal Al Nasser / ReutersShow less

Saudi Arabia's Tadawul has entered an initial agreement with the Abu Dhabi Securities Exchange to allow for the cross-listing of shares.

In January last year, the kingdom’s Capital Market Authority (CMA) said it would allow public companies from foreign markets to seek a secondary listing on the Tadawul.

The agreement with the ADX is the first among GCC exchanges since legislation was passed last year.

According to a statement posted on the ADX website, the agreement calls for “exploring opportunities for technology and market data sharing, cross-listings, as well as collaboration on market development initiatives”.

Saudi Arabia’s stock market, the most liquid in the region with more than US$1.3 billion (Dh4.7bn) traded daily, has been considering a wider opening of its market for several years.

Currently, foreigners have only limited opportunities to invest through indirect ownership and exchange-traded funds that track indexes.

The regulatory framework introduced last year was considered a major step towards foreign ownership of Saudi-listed companies.

“A foreign issuer whose securities are listed in another regulated exchange may apply for its securities to be registered and admitted to listing,” the CMA said in a statement on its website last year.

“The authority may admit the securities to listing provided that, in the authority’s opinion, the listing rules applicable in the foreign issuer’s jurisdiction of listing are at least equivalent to these rules.”

Separately, the head of the Dubai Financial Market, Essa Kazim, told Bloomberg yesterday he expects "initial public offerings to flood back into the market" amid improved valuations.