Foreigners will still not be able to invest in three companies despite measures to open up Saudi markets to overseas investors, according to a study by the Makkah Chamber of Commerce and Industry (MCCI).
The companies, Jabal Omar for Development, Makkah Company for Building and Construction and Taiba Holding Company, all work in real estate development and account for about 3.3 percent of the Saudi stock market's total market value, or SR71 billion, as of August.
The report outlined that the foreign investment bylaw in the Saudi stock market has banned foreign investors from purchasing or owning shares in companies working in Makkah and Madinah.
Jabal Omar accounts for 70 percent of the three companies' market value, or SR50 billion, said the report.
Makkah Company for Building and Construction has a market value estimated at SR14 billion and Taiba Holding Company is valued at SR7.1 billion.
In August, the Capital Markets Authority had announced a draft bylaw allowing foreign investment in financial institutions qualified to be listed on the Saudi stock market.
The proposed rules, for which feedback will be collected until Nov. 20, have set a ceiling for foreign ownership in any eligible company, reaching 10 percent of the total market value.
The rules also said an individual foreign investor's ownership should not exceed 5 percent of the shares of any company and ownership by any given foreign company must not exceed 20 percent.
Also, collective foreign ownership must not exceed 49 percent of any listed company.
Foreign investors do have to abide by the basic regulations of companies listed in the bourse or any directives issued by their supervising authorities.
This clause means foreigners cannot invest in the three companies because not only does the proposed law forbid the entry of overseas investors in Makkah and Madinah, the basic regulations of these companies forbid non-Muslims from owning shares in them.
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