Saudi Shares Rise: Expectation of Lifting Foreigner Limit

Saudi Arabia's Stocks on the Upward Momentum

Saudi Arabia's Tadawul Stock Exchange Index (TASI) has surged on the prospect of allowing foreign investors to take a majority stake in publicly listed companies. The development has fueled speculation that the kingdom could benefit from billions of dollars of investment.

Saudi Arabia is expected to soon allow foreigners to own up to 50% stakes in publicly traded companies, Bloomberg reported. This sent TASI up 5% on Wednesday. Saudi bank stocks were up 9%.

Foreign Investments Expected at $10 Billion

Saudi Arabia is set to allow foreign investors to hold large stakes by the end of the year in a bid to revive its underperforming stock market and support Crown Prince Mohammed bin Salman's economic diversification plans.

JPMorgan and EFG Hermes estimate a total capital inflow of $10.6 billion if the Saudi Arabian Capital Market Authority raises the current 49% foreign ownership limit to 100%. Both institutions expect that these new inflows will be capitalized upon most by large banks such as Al Rajhi Bank.

Which Banks Will Gain?

Analyst Pankaj Gupta predicts that other banks such as Saudi National Bank and Alinma Bank will also gain significantly from the process.