Economy

Opening investment Kingdom’s financial market aims offset declining revenues

The Saudi regime allowed foreign companies to be listed on the Kingdom’s financial market as part of its attempts to offset declining revenues and alleviate the unprecedented crisis in the Saudi economy.

The Saudi Stock Exchange (Tadawul) announced that it will allow the listing of foreign companies in the Saudi stock market after the issuance of the CMA’s approval of the amended listing rules, which include provisions for listing foreign companies.

Tadawul said that foreign companies listed on the market will be subject to the same conditions of listing, disclosure and governance as Saudi listed companies, and their shares will be traded in Saudi riyals.

The Saudi regime is seeking to attract foreign capital amid severe financial crises facing the Kingdom due to the decline in oil revenues, pushed it towards more external borrowing and withdrawal from the monetary reserves, which has eroded significantly in recent years.

According to official data, the kingdom lost about 842 billion riyals ($ 225.3 billion) from the end of 2014 to the end of August of this year, with reserves amounting to 1.904 trillion riyals ($ 507 billion), compared to 1.910 trillion riyals in the same month. Last year 2018, and about 2.746 trillion riyals the end of 2014.

The Kingdom also suffered from numerous economic risks and the decrease of foreign investments after the murder of Saudi journalist Jamal Khashoggi at his country’s consulate in Turkey on October 2, 2018, as well as the European Commission’s decision to blacklist Saudi Arabia for money laundering and terrorist financing in February, observers say.

Tadawul said it has worked with the Capital Market Authority to develop the provisions and requirements for listing foreign companies and to conclude bilateral agreements with regional markets to link the Saudi market with other markets.

For its part, the Saudi Arabian Monetary Agency (SAMA) announced the amendment of some articles of the requirements of the rules of account opening, including the acceleration of procedures for opening bank accounts. The move is one of the facilities that help attract foreign investment, observers say.

In a statement, SAMA said that the new items included an amendment to the rule on opening bank accounts for institutions engaged in e-commerce activity, in a move aimed at facilitating the procedures of opening accounts for those institutions and to promote this type of modern trade, and coincided with the amendment to introduce instructions within the rules of accounts. The bank has set time periods for opening accounts.

In detailing the amendments to some articles of the requirements of the rules of opening accounts, SAMA stated that it decided to introduce a clause within rule (100) of the general instructions on opening bank accounts, including the time limits for opening bank accounts, stating that banks should open accounts for natural and legal persons. The opening requirements do not include any special approvals from the concerned departments within one working day of completion of the requirements, and within two working days for those accounts that require special approvals.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button