Prince Alwaleed urges opening Saudi market to foreigners

April 2, 2013
Prince
Saudi Arabian billionaire Prince Alwaleed bin Talal called on the kingdom's regulators to open up the stock market to foreigners and reduce its reliance on retail investors.

DUBAI, April 2 (Reuters) - Saudi Arabian billionaire Prince

Alwaleed bin Talal called on the kingdom's regulators to open up

the stock market to foreigners and reduce its reliance on retail

investors.

In a televised interview aired on 23 channels, the prince,

who owns stakes in some of the world's top companies, said Saudi

Arabia needed to upgrade its equity markets to international

standards while protecting its blue-chip companies from hot

international money.

"The Saudi market needs to rely less on individual

investors. Saudi Arabia is 90-95 percent dominated by individual

investors and 5 percent by institutions, opposite to what is

there in America and Europe," bin Talal said.

"Yes there is concern about the hot money, but we can

control foreign investors by, for example, introducing shares

Class A or B and give access to 20 percent or 30 percent of the

shares of each company," the prince said.

He added that Saudi Arabia had the right to protect

strategic companies like Saudi Basic Industries Corporation

(Sabic) from hot foreign money.

Foreigner investors can only buy Saudi shares through swap

deals made by international investment banks, and via a small

number of exchange-traded funds (ETFs).

Abdulrahman al-Tuwaijri, chairman of the Capital Market

Authority (CMA), had said last year that the kingdom was

planning to open up the market to foreign investors but that it

should be done in an orderly and gradual manner to make sure it

did not threaten market stability.

The CMA is considering allowing qualified foreign investors

to take a capped share in each Saudi company, with international

buyers able to own a total of around 20 percent of the market's

value, according to proposals circulated to the financial

industry last year.

Saudi Arabia's benchmark has risen 5.5 percent so

far in 2013, and the economy is forecast to grow 4 percent this

year, according to a Reuters poll in January.

(Reporting By Mirna Sleiman; Editing by Will Waterman)