Company Directors: Saudi Stock Exchange the Largest in the Region with Continuous Chances for Development.

Several stock exchange dealers confirmed that the Saudi stock exchange is the largest in the Arab region, with the greatest number of interactions, holding great promise for investment in the petrochemical and construction industries.

Last June, the Saudi Capital Market Authority agreed to allow foreign investors to deal directly with Saudi stocks, as well as enabling foreign investors to own more than 5% share of companies, as long as they have at least 5 years experience of dealing in shares,and are in control of at least 5 billion dollars in investments.

Analysts and followers of the market stated that it is unlikely that foreign investments  will take up a large proportion of current exchanges, predicting that this would take at least 2 years.
Aramco, the Saudi public company, announced last May that they are considering different options to incorporate into the stock exchange, for example, including a suitable proportion of the company's stocks.

Crown Prince Mohammed Bin Salman, in a statement to The Economist, stated that the Saudi government is studying the possibility of selling stocks in Aramco, in a drive to increase privatisation, in light of the current oil crisis.

At the end of 2015, the financial value of stocks traded on the Saudi exchange reached a value 1.5 billion Saudi Riyals, with a drop of around 12.9%, compared to 2014. The  net value of dealt stocks reached 2.1 billion Saudi Riyals in 2015, a drop of 22%, with an average daily value of dealt stocks at 5 billion Riyals.

Khaled AbdulRahman, board member at CI Capital brokerage company, stated that the Saudi market is the largest in the Arab region, as well as the most organised regarding monitoring, and quick application of the Council's decisions or adjustments and consumer rights protection, and exemplifies a great variety of companies enrolled ranging from petrochemicals to real estate and construction.
AbdulRahman added that there has been an interest from international financial institutions to enter the Saudi stock market, after it was opened up to international investors. 

He stated that interested investors centred around 3 main regions; Eastern Europe including Russia and Poland, Southern Europe, including Turkey, Greece and Cyprus, and the Arab region, including the Emirates, Egypt and Qatar. 

Amr Helal, board member of Dwight-C I Capital Investments, explained that one of the Saudi market's faults is the fact that its index is linked to oil prices, since it does not offer the required variety of sectors despite the presence of large sectors on the exchange, such as banking.

Mohsen Adel, assistant director of Egyptian Finance Association, stated that the Saudi stock market is one of the most important in the Middle East region. He added that current steps to attract foreign investments will enable the market to become among the best globally, within a short space of time. He elaborated that the Saudi stock market utilises the best technological infrastructure in the region, which is only used by the top 30 stock markets in the world.

Adel pointed out that the Saudi market also includes greatest proportion of participation from its local citizens, which is considered the largest among the Arab countries.

He explained that the Saudi market has 2 main ways to maximize its opportunities during the coming period. The first of these would be the privatisation of Aramco, while the second involves making serious attempts to change the structural basis of the stock exchange, via launching some of the Saudi Stock Exchange 'Tadawul', in a simulation of the Dubai stock exchange experience.

Adel pointed out that problems facing the Saudi stock exchange are related to the fact that it is linked to oil prices and also due to the low number of participating companies, a total of 118, with hopes to include up to 250 companies in the near future.

He also praised the Saudi market's attempts to initiate a special system of dealing for companies with losses. He further expressed his admiration of the penal system implemented, regarding money laundering and related criminal activities. Saudi companies are required to submit their accounts and transaction records within 21 days of the end of the financial year or the financial quarter. This is contrary to the Egyptian system which requires companies to submit their records within 45 days.

Ahmed AbuHussein, of Cairo Capital Securities stated that the Saudi market is still beyond the reach of Egyptian investors, due to the huge losses they have incurred lately, in addition to the large number of transactions on the Saudi market.

Acting Director for Mubasher International Share Trading Company clarified that opening up the Saudi market to foreign investments coincided with the drop in oil prices and hence the positive effects have not materialised yet.

Another stock trading expert in the Gulf stated that the strict rules for participation of foreign investors are the reason for the delayed results within the Saudi market. He elaborated that once the Saudi  market becomes incorporated into the Morgan Stanley index for new initiative markets in 2017, the Saudi market will receive greater attention.