JEDDAH – Saudi Arabia plans to start cross-listing foreign companies on its exchange within a year, with a focus on Gulf Arab firms, as it moves closer to opening up its market to foreign investors, a senior stock market official said Tuesday. Waleed Al-Bawardi, director of cash and markets at Tadawul, the Saudi stock exchange, said details on disclosure requirements were being hammered out with the Capital Markets Authority (CMA) after the regulator amended listing rules in January to allow for cross-listing. “We are working with the regulator, trying to detail the regulations for the cross-listing," he told Reuters ahead of an event to unveil a new Tadawul initiative at the Jeddah Chamber of Commerce. “I think within a year we can have some companies ... the initial focus could be on the (Gulf Arab) region and then we'll see how it goes but this is still initial discussion." Investors are keenly watching long-awaited Saudi moves to allow foreigners to directly invest in the Middle East's largest stock market, which is valued at $337 billion. Such a move is likely to attract considerable interest as it gives direct access to blue chips like Saudi Basic Industries Corp., the world's most valuable chemical company. Foreigners are currently only allowed to invest in Saudi firms through share swap transactions via international investment banks who deal with local markets. The Kingdom, the Arab world's biggest economy, has taken steps toward direct ownership. But the regulator has said it will open the market to foreigners only gradually. Bawardi said the benefits of direct foreign ownership, including the stability offered by institutional investors in a market currently 95-percent dominated by retail investors, were clear. “I think lots of work has been completed already but we are waiting for approval from the higher authorities, mainly from the regulator," Bawardi said. Asked if the market will be opened up this year, he said, “It could be. We were expecting it to happen last year so there is lots of expectation ... it could be this year, next year or even the year after." The Kingdom is keen to get more family-owned firms to list on the bourse, which has already seen a flurry of initial public offerings in 2012. “We are anticipating more (IPOs) to come this year, I would guess about another five to six ... we think that with the appetite we are seeing there will be more to come next year," Bawardi said. Bawardi also said he expects Tadawul to introduce the option of selling tradable rights this year for investors who do not want to subscribe to a rights issue. “He could sell it through the exchange ... this could happen this year," he said. “We are waiting (for) regulatory approval but we are ready for it as an exchange... we hope it will be this quarter." – Reuters
