Saudi Arabia’s Tadawul has been the largest loser in the GCC region so far this year, with shares bearing top oil companies to invest in 2016 brunt of the negative investor sentiment due to the indecision prevailing among OPEC and non-OPEC members to freeze oil production. The kingdom has also scaled down its investments in various projects it had planned earlier.
The value of contracts awarded plummeted by 39 per cent in the first quarter of 2016 followed by a decline of 27 per cent in the second quarter on a quarter-on-quarter basis. Contraction in spending in the economy made investors skeptical and they heavily withdrew from Saudi stocks. In measures to save the equity markets and boost investments, Saudi Arabia aid it will lift restrictions on foreign investment in its securities markets on September 4, sooner than previously indicated. Other reforms in the stock market are also in line with the country’s vision to reduce its dependence on oil. Each foreign institutional investor is also allowed to own directly a stake of just under 10 per cent of a single listed company, up from the earlier ceiling of 5 per cent.