This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Saudi Arabia's Market Gushes at Prospect of Foreign Investment

NEW YORK (TheStreet) -- Saudi Arabia, which has closely guarded its markets from the rest of the world, is throwing open a part of it for your investment.

The $350 billion Saudi stock market is no longer out of bounds for foreigners. The oil-producing nation's Tadawul All Share Index jumped to a whopping six-year high following the announcement from the Riyadh-based Capital Market Authority that at least part of the markets will be open to all as of 2015. Rules of participation will be released before then.

When Tadawal surged by 2.8%, it was the highest since May 2008. "Tadawul is very large. To put that in context, it's the just under 10% the size of the Nasdaq and more than twice the size of Israel's market," says Shane Leonard, CEO of Stockflare.

Read More: Williams: No Gas for EU!

He adds, "The Saudi market has a very active local investor community. In the first half of 2014 the market traded $300 billion worth of shares," or nearly 60% of its total value.

What prompted the world's biggest oil exporter -- who is also home to the biggest share of sand dunes, richness and culture on earth -- to open its doors?

After a long stint of consistent growth notwithstanding the crisis in Egyptian countries, King Abdullah has kept the country growing at 6.4% every year with his well-calculated financial reforms. The government is now pursuing a $ 130 billion plan to boost non-energy industries, clearly understanding this is where the future lies.

Financial analysts think opening the market to international investors will certainly prompt MSCI (MSCI)  to classify Saudi Arabia in its Frontier Indices funds as an "emerging market" and lure as much as $40 million in foreign cash at the very outset when the market opens.

Read More: How Many More 100-Point-Swing Days on the DJIA Can You Take?

With foreign players in its marketplace, Saudi Arabia hopes to gain entry into the MSCI's emerging markets fund list, which could lead to the creation of a Saudi Arabia Index.


At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%
YHOO $43.48 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs