Crown Prince donates SR1 billion to support housing for eligible families    Saudi, Iranian foreign ministers discuss Oman-mediated talks with US    Prince Sultan University launches first bachelor's program in language and media    Al-Falih: Eastern Province hosts 700 investment opportunities worth SR330 billion    India demolishes houses of 10 alleged militants days after deadly Kashmir attack    Yemen's Houthis claim dozens killed in US strike on prison holding African migrants    Putin announces three-day Russian ceasefire in Ukraine from 8 May    Suspect charged after Vancouver car ramming leaves 11 dead    Rock & Roll Hall of Fame picks Outkast but not Oasis    Makkah police arrest Yemeni and Egyptian suspects of fake Hajj campaign    stc reports strong first-quarter 2025 results with 11% rise in net profit    Saudi Awwal Bank records SR2.1 billion net profit after zakat and income tax for 1Q25    Virgin Atlantic celebrates one month of nonstop service between London and Riyadh    Al Ahli cruise past Buriram into AFC Champions League Elite semi-finals    Duran leads Al Nassr past Yokohama Marinos into AFC Champions League Elite semi-finals    Saudi orchestra to perform at Sydney Opera House in May    Al Hilal thrash Gwangju to reach AFC Champions League Elite semi-finals    Saudi Theater Commission launches its Work and Learn Project in UK    The season has begun — and one comment shook us all    Average life expectancy in Saudi Arabia rises to78.8 years    Pakistani star's Bollywood return excites fans and riles far right    Veteran Bollywood actor Manoj Kumar dies at 87    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Gulf stock markets to attract foreigners
Published in The Saudi Gazette on 09 - 02 - 2016

The Egyptian Exchange (EGX) is widely expected to continue to continue facing difficulties in attracting foreign and Arab investors in upcoming period, not only because of its performance, but because the Gulf stock markets pose major competition over the same target investors.
According to capital market managers and investment experts, Gulf markets are expected to open up to foreign investors. This is particularly in light of investors' tendency towards privatization operations, as well as the tendency to place the Saudi Arabian Oil Company's (Aramco) assets on the Saudi stock market, and other foreign markets. Further, these tendencies come in parallel with the easing of trading restrictions on foreign institutions.
This coincides with other Arab stock markets such as Kuwait's move to exempt foreigners from capital gains tax, which is postponed in Egypt until May 2017. That means that Egypt is facing a challenging position in front of investors, while Gulf markets offer them incentives.
Direct Investment Manager at the American Cartel Capital Ayman Abu Hend said the EGX has been facing a major challenge in maintaining its leading positing in terms of attracting foreign investors to the region over the past year.
Egypt is losing its competitive edge in attracting foreign investors, to the benefit of other markets in the region, whereby Gulf markets have begun to partially lift restrictions on foreign investments, while Egypt has imposed new taxes on profits.
President Abdel Fattah Al-Sisi approved last August the postponement of the 10% taxes on profits from the stock market from 18 May 2015 until 18 May 2017, while maintaining the dividend tax levied at 10%.
Abu Hend said that despite the difficulties faced by the Gulf markets over the past year, they have allowed more flexibility for foreign investors. He highlighted in particular Saudi Arabia's decision to allow foreign institutions located outside the Gulf to directly trade on stocks. Kuwait decided to exempt foreign investors from capital gains taxes.
The EGX will be in a tough spot facing other Arab stock markets in the period ahead. "Saudi Arabia seeks an upgrade to the Morgan Stanley Emerging Markets index, after Qatar and the UAE have joined," Abu Hend said.
"There are also intentions to place Aramco assets on the stock market, which are expected to have the highest market value among all companies in the world."
International investment banks have already begun to communicate with Saudi Arabia to learn more about the developments with Aramco's IPO, which is expected to exceed tens of billions of dollars in light of speculations that Aramco's market value has exceeded $3tr.
Aramco said in a press release that it began several studies to launch an IPO for some of the company's assets, whereby the options vary between offering investors direct assets, or offering a package of its projects in different sectors, including refining and chemicals.
The company has enormous oil reserves, registering about 265bn barrels, equivalent to more than 15% of the world reserves.
The CEO of Global Investment House in Egypt, Ahmed Ali, predicted that the Saudi market will attract more investments compared to the Egyptian market, since the Saudi government has adopted a strategy allowing more space for the local and foreign private sector to contribute to the economy, following the decline in oil prices.
He noted that offering Aramco's assets will be the first step in a series of IPOs launched by major Saudi companies as part of Saudi Arabia's privatization program aiming to attract more foreign investments.
Ali said the Saudi Exchange (Tadawul) is currently characterized by low-priced stocks, with large tradings of about SR6 bililon every day, which encourages foreign investors to move their funds there, stimulated by the easing trade restrictions on foreigners.
According to data from the Saudi website, Argaam, the price to book value of the Tadawul market declined 1.3 times, the lowest recorded level over the past 14 years. Price to book value is calculated by dividing the profits of the company by its book value.
Ali said that stock markets of Qatar and the UAE have not yet benefited from their promotion on the Morgan Stanley index in mid-2013 due to the escalation of geopolitical tensions in the Middle East and the fall of oil prices. He said that once the Gulf recovers from the fall of oil prices, both markets will have strong position, capable of attracting indirect investments.
Joining the Morgan Stanley index provides an advantage to markets in terms of attracting foreign investments. Three Arab markets are currently listed on the index, namely Egypt, Qatar and the UAE. — SG


Clic here to read the story from its source.