Front End: Frucher’s Saudi Love-In
1 December, 2015
CEO’s Sudden Departure Hits Saudi Plans
1 December, 2015
Euromoney, December 2015 
Saudi Arabia is six months in to its programme to attract international institutional investors into its stock market. The verdict so far: an impressive willingness to listen and communicate, but slow progress in terms of getting any actual money in.
Read this at Euromoney.com here
According to the Saudi Stock Exchange, so far nine institutional investors have completed the Qualified Foreign Investor (QFI) registration process, and a further two QFI clients. On paper, it sounds pretty impressive: the investors who have been attracted between them have more than $5.65 trillion under management. It’s a little bit lop-sided, though, by the fact that one of them is Blackrock, which is the world’s largest fund manager (it accounts for $4.5 trillion of that number, based on its asset position on September 30), and the extent of its investment so far is the setting up of a New York-listed Saudi ETF under its iShares arm.
In fact, a total of $126 million of Saudi Arabian stock market assets are held under the QFI framework so far – and $115 million of that is the transfer of swap holdings, under the previous P-note structure for investment, into the underlying stock, as any new QFI licencee is obliged to do. So far the total accumulated net investment under QFI is just $9.2 million; QFI funds account for a barely visible 0.03% of the overall Saudi stock market.
Is it a disappointment? Adel Al-Ghamdi, CEO of the Saudi Stock Exchange until his shock resignation on November 12, says not. “It’s been quite slow,” he tells Euromoney. “But I think it’s important to note that it’s about quality not quantity. Do we want further participation? Absolutely we do. But the framework was only introduced in June. The numbers will come.” (Al-Ghamdi’s full interview, apparently the last before he resigned, is in the feature after this one.)
