Gulf stock markets consolidated in quiet early trade on Tuesday with Saudi Arabia’s bourse unmoved by the announcement of reforms designed to stimulate trading and draw fresh foreign money into the market.
The Capital Market Authority said it would lower the minimum assets-under-management requirement for foreign institutions investing directly in the market, and allow each foreign investor to own a stake of just under 10 per cent of a single company. Previously, the ceiling was 5 per cent.
Meanwhile the Saudi Stock Exchange said it would introduce the settlement of trades within two working days of execution, a reform that could help the market join MSCI global indexes. Currently, settlement is same-day, which is inconvenient for many foreign investors.
But the reforms will not be implemented before 2017, and other factors such as high valuations have also been deterring foreign investors, so the market barely reacted.
The Saudi stock index edged up 0.2 per cent in early trade, with Arabia Insurance Cooperative climbing 3.1 per cent after the regulator approved a request for it to reduce its capital.
Jarir Marketing fell 0.8 per cent and Saudi Hollandi lost 1.5 per cent as both stocks went ex-dividend.
Dubai’s index was flat and Abu Dhabi dropped 0.5 per cent as some banks remained soft after last week’s disappointing first-quarter earnings, with Abu Dhabi Commercial Bank off 0.6 per cent. Qatar edged down 0.1 per cent.
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