“I think FDI will boost confidence in the economy, help it with new players and a better institutional system.”
He added. “I think the next step will be the inclusion of the Saudi market on the Morgan Stanley index, and the market will capture as much liquidity as other GCC markets.”
After the announcement of the decision to open the Saudi market, Abu Dahsh said, “FDI will boost confidence in the economy, help new players, and a better institutional system.”
<Following the announcement of the decision to open the market next year, an official at MSCI Market Indices said: “The company will consult with investors on the inclusion of Saudi Arabia in its stock indexes, and may make a decision to include it as an emerging market in June 2015.”
An economist said. <For his part, economist Ihsan Abu Hilaqa said: “This is a long overdue step. For years, the Saudi stock market has been a domestic market, although it has avoided major global financial crises. It was unacceptable for the market to remain local in a country with a global economic weight.”
He continued. He continued: “The stock market will bring another type of investment that is based on creating positions, based on stocks, and we are missing this type of investment.”
Abouhleika added.
Abouhleika added: “The decision is necessary to rationalize the movement of the index, which is not affected by positive economic news, whether locally or in the region, while it is quickly affected by negative news,” he added: “The entry of institutional investors will have a clear contribution to rationalize the movement of the index and reduce the tendency to react to negative events.”
Institutional investors will have a clear contribution to rationalize the movement of the index and reduce the tendency to react to negative events.
Index awaits
<The Saudi stock market index jumped more than 3%, surpassing the 10,000-point level in the first day's trading after the decision, as traders were optimistic about the decision. The rises included all sub-indices and trades were concentrated on leading stocks that may attract the attention of foreigners.He continued. <“We are waiting for the announcement of the rules to see if there will be a specific ownership percentage for foreigners. But until that is announced, I think 10,400-10,500 points is a worthy level for the index.”
Hisham Tuffaha said. <Hisham Tuffaha, a portfolio manager in Riyadh, called the decision to open the market “very positive,” as evidenced by the bourse's rally today. But he added: “We should be wary of unjustified rises, because at the end of the day the foreign investor will enter the market in a regulated manner, and will not come to speculate, and foreigners will focus on investment companies because their valuation is cheap.”
Tuffaha expects the market to rise.
Tuffaha expected the daily trading rate to rise to more than ten billion riyals after Eid, and the market value of the stock exchange to rise to about 620 billion dollars within a year.
Tuffaha continued. <“We could see the market index at 10,500-10,800 points within five months,” he said. Analysts noted that this may be reflected in the profits of banks that own brokerage subsidiaries.
Analysts noted that this may be reflected in the profits of banks that own brokerage subsidiaries. Banks recorded a remarkable growth in their profits during the first half of 2012, when speculation increased that the market was about to be opened to foreigners, and when daily trading values rose to 9-12 billion riyals.
Analysts and analysts unanimously agreed. Analysts and experts unanimously agreed that the petrochemical sector will be the first attraction for foreign direct investment in the market because of the Kingdom's weight in the oil sector and in the petrochemical industry.
This was clearly evident during the first half of 2012, when speculation about the impending opening of the market to foreigners increased. This was evident in today's trading with the petrochemical index rising 4.12 percent by the end of trading, and SABIC's stock rose by nine percent during the session before paring its gains and closing up 6.8 percent.
Analysts also predicted that the petrochemical sector will be the first to attract foreign direct investment in the market. Analysts also expected foreigners to be attracted to the banking sector, which is characterized by cheap valuations, the telecommunications sector and a number of companies in the retail sector.
Foreigners were also likely to be attracted to the banking sector, which is characterized by cheap valuations. <By the end of trading today, Al Rajhi Bank jumped 2.2 percent, Samba 6.1 percent, Mobily 5.1 percent and Saudi Telecom 2.9 percent.
Sukuk market
Leading economists Abu Dahsh and Abu Hilaqa agree that opening the market to foreign investment is an important step, but it may not be enough to absorb the large liquidity expected to enter the market.<Abu Dahsh said: "With the high volume of liquidity from foreigners, we hope this will be reflected in the bond market. A lot of foreigners are showing interest in the sukuk market and it is very important to create a huge sukuk market to absorb the upcoming liquidity, which is expected to be huge."
Abou Dahsh said.
Abulhaliqa said: "The Saudi market has so far been primarily a stock exchange market and has not played a major role in attracting funds, as banks are always the first option for companies to obtain financing and then the stock exchange comes as a second option."
He said: "It is very important to create a huge sukuk market to absorb the next liquidity, which is expected to be huge. He said: "The Saudi market is still a timid market, but Riyadh is qualified to be the first Arab and Islamic financial center in the Islamic bonds and sukuk market, mainly because it is based on a large economy."
He continued. He continued: "This matter will not come by wishful thinking, but the Capital Market Authority must really seek it and provide the necessary infrastructure for it, and allowing foreigners to invest directly in the market is necessary to implement this, but it is not enough."
The head of the Capital Market Authority said that Riyadh is qualified to be the first Arab and Islamic financial center in the Islamic bonds and sukuk market for the most important considerations. <The head of the Capital Market Authority, Mohammed Al-Sheikh, said in September: The CMA is seeking to develop the sukuk market, which does not exceed three percent of GDP, and is conducting a study to develop debt instruments available for investment. <Abouhaliga pointed out that at the moment the issuance of sukuk and bonds is limited to those wishing to implement projects within the Saudi economy. "In the future, we would like to see the issuance of sukuk to be used to develop projects within the GCC... This will bring great benefit to the economy and will help to utilize the accumulated funds."
Abouhleika noted that the issuance of sukuk and bonds is currently limited to those wishing to carry out projects within the Saudi economy.
