ranca’s special report – Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors – examines the potential opportunity for global investors. It also throws light on the fundamental strength of the Saudi economy and how it has had an impact on global markets.
This inaugural GCC Wealth Insight Report by Emirates Investment Bank and Brunswick Insight, draws attention to the GCC economy and its investment community. The GCC Wealth Insight Report is based on a survey of High Net Worth Individuals (HNWIs) across the Gulf Cooperation Council (GCC).
al shuaa capital annual-report-2017 by www.prism-me.comPrism
Annual Report Design in Dubai and Annual Report Design for al shuaa Capital please take a look at our website
https://www.prism-me.com/our-services/advertising-and-pr/brochure-design-print/ and contact us on 04 3827862 / 0558500095 for a quick quote
Retail Domination of Saudi Stock Market Trading Activity Continues to Provoke...Adel Al-Ghamdi, CFA
Since opening its doors to Qualified Foreign Institutional Investors in mid-June 2015 the Tadawul All Share Index ended the year 28% lower, with Saudi retail investors inciting a sizable portion of this decline.
This inaugural GCC Wealth Insight Report by Emirates Investment Bank and Brunswick Insight, draws attention to the GCC economy and its investment community. The GCC Wealth Insight Report is based on a survey of High Net Worth Individuals (HNWIs) across the Gulf Cooperation Council (GCC).
al shuaa capital annual-report-2017 by www.prism-me.comPrism
Annual Report Design in Dubai and Annual Report Design for al shuaa Capital please take a look at our website
https://www.prism-me.com/our-services/advertising-and-pr/brochure-design-print/ and contact us on 04 3827862 / 0558500095 for a quick quote
Retail Domination of Saudi Stock Market Trading Activity Continues to Provoke...Adel Al-Ghamdi, CFA
Since opening its doors to Qualified Foreign Institutional Investors in mid-June 2015 the Tadawul All Share Index ended the year 28% lower, with Saudi retail investors inciting a sizable portion of this decline.
AFC Iraq Fund April 2016 Fund FactsheetThomas Hugger
AFC Iraq Fund's investment thesis is to achieve long-term capital appreciation by investing in a diversified portfolio of listed Iraq equities as well as foreign listed companies that derive the majority of their business from Iraq and / or Kurdistan.
Australian Business Forum helps Australian SMEs and businesses to understand the Chinese market and refine their China strategy.
http://abf.events/
ABOUT THE PRESENTATION
James Gerraty has been the Australian Securities Exchange's Manager of Listings in Melbourne since 200. ASX is one of the world's 10 top listed stock exchange groups, the listings unit of which ensures that the ASX provides fair, orderly and transparent markets.
This presentation, given at the Fortune Forum 2015 Australian Summit, covers capital raising in equity markets, corporate governance, periodic and continuous disclosure, and more.
AFC Iraq Fund April 2016 Fund FactsheetThomas Hugger
AFC Iraq Fund's investment thesis is to achieve long-term capital appreciation by investing in a diversified portfolio of listed Iraq equities as well as foreign listed companies that derive the majority of their business from Iraq and / or Kurdistan.
Australian Business Forum helps Australian SMEs and businesses to understand the Chinese market and refine their China strategy.
http://abf.events/
ABOUT THE PRESENTATION
James Gerraty has been the Australian Securities Exchange's Manager of Listings in Melbourne since 200. ASX is one of the world's 10 top listed stock exchange groups, the listings unit of which ensures that the ASX provides fair, orderly and transparent markets.
This presentation, given at the Fortune Forum 2015 Australian Summit, covers capital raising in equity markets, corporate governance, periodic and continuous disclosure, and more.
Key stories, statistics and examples from the world of digital media, January - March 2011.
Complied by Dan Calladine, Head of Media Futures, Aegis Media.
dan.calladine[AT]aemedia.com
Havas Worldwide Genève - une nouvelle vision de la communauté, de la citoyenn...Havas Worldwide Genève
La nouvelle étude ProSumer réalisée par Havas Worldwide nous apporte une nouvelle vision de la communauté, de la citoyenneté et des actions sociales.
Qui, aujourd’hui, a le plus de pouvoir pour opérer des changements dans notre société ?
Si vous pensez que ce sont les gouvernements, vous faites partie d’une minorité.
Selon l’étude "Communities and Citizenship: Redesigned for a New World" l’acteur le plus puissant en matière de changement est "l’individu lui-même à travers les médias sociaux." (35% du panel interrogé cite les médias sociaux comme étant l’outil de création de changement social alors que 25% met en avant les gouvernements/politiciens, 24% ce que nous consommons et 16% les entreprises).
La Iglesia Católica y la PUCP. IMA - Sondeo de Opinión Pública Marzo 2012 en ...IMA - Opinión y Mercado
LA IGLESIA CATOLICA Y LA PUCP
Nombre de la PUCP y responsabilidad
El 56.3% declara estar en desacuerdo que a la PUCP se le retire los nombres de Pontificia y Católica; y solo un 22.9% está de acuerdo y un 20.8% ns/nc
Un 38.7% además percibe que la responsabilidad de esta situación la tiene la Iglesia Católica mientras que un 25.6% considera que son los directivos de la universidad encabezados por su rector Marcial Rubio tienen responsabilidad sobre esta situación así como un 13.1% piensa que son los directivos y alumnos, y un 22.5% ns/nc
Siguiendo esta tendencia el 56.1% considera que por justicia a los directivos de la PUCP les corresponde administrar los bienes de la universidad, un 16.4% dice que corresponde a la Iglesia Católica y un 27.6% ns/nc.
Green World Group announce incredible offer for NEBOSH course in Jubail at 5500/-SAR Only and along with IOSH Managing Safely & 50+ U.K Certification for free of cost.
Referencement Google | Mayday & Caffeine: Impacts & Solutions Stratenet.com
Slideshows de la conférence: Référencement Google Mayday & Caffeine Update le 09/09/2010 à Gosselies, Par Stéphane Bouchez eMarketing Strategist de l'agence www.stratenet.com & www.oneclic.com
Opportunity Arabia conference
Thursday 2nd October 2014
Omar Bahlaiwa
Secretary General, Saudi Committee for International Trade
'The Kingdom of Saudi Arabia: The Gateway to Investment Opportunities in the Middle East'
Saudi Arabia - Emergence of an Innovation Kingdom | An Aranca Special Report ...Aranca
Supported by resilient collaboration between the government, academia, and industry, the Kingdom of Saudi Arabia has laid the foundation for a knowledge-driven economy. Innovation-led strategic transformation is underway in the Kingdom and is likely to be the foundation of the next wave for economic and social progress.
· US equity markets have performed very well but the MSCI World (excluding US) has been relatively subdued and remains 20% below its 2008 peak.
· The global outlook for the twenty-twenties is distinctly ominous with China, Europe, the UK and the US facing systemic challenges.
· High equity yields, creative fiscal measures and unorthodox monetary tools might help markets temporarily but can only delay the day of reckoning.
· The TASI was as much as 19% higher at the end of April ahead of a massive inflow of foreign money but the index trade is now over.
· There are at least seven signs that could limit the scale of the economic rebound and make it difficult for the stock market to move higher.
· Marmore forecasts aggregate GCC profits to decline by 1.8% this year with earnings in Saudi Arabia dropping by 6.1%.
· A lower risk profile can mitigate the lurking dangers as is optimizing portfolios to benefit from falling interest rates and avoiding cyclicals.
Foreign Investment in Saudi Arabia WhitepaperAlexis Aboagye
Saudi Arabia has had increasing interest for businesses since
the oil expansion of the 70s and 80s but as the world moves
away from oil power to renewable energy the Kingdom has
also looked to move with the changes. Not only with the
expansion into more sustainable power but also to expand its
Sovereign wealth fund and private sector businesses to rival
other major cities.
The Kingdom is already the biggest economy in the region,
but the government has taken more steps recently to become
an easier place to do business and attract more companies to
the private sector. Instead of only relying on the size of its
economy, it has become a more welcoming place for foreign
investment. The introduction of numerous online portals, the
easing of processes and implementing new licenses all lead
into the larger goal of a diversified economy as laid out in
Vision 2030.
No company set up process can be discussed without
mentioning the role of Saudi Arabia General Investment
Authority (SAGIA) the entity itself has worked hard to not
only promote the Kingdom in key locations across the world
but also to streamline its processes in order to ease the process
for the companies it worked so hard to attract.
SAGIA is only a small part of the export process, however
important it is. There are other elements that happen after
setting up, which are important to operate in compliance
with the law.
In this white paper, we look to what the future of business
will look like in Saudi Arabia, the recent reforms of SAGIA
and the steps that companies need to take after they have
set up in the Kingdom.
The GCC is in a fateful economic battle that has troubling cyclical, structural, and systemic components — driven by risks around oil and a disruptive post-pandemic digital world for which it is ill-prepared. Businesses are unravelling as entitlements are withdrawn and regulations rolled back. This paper proposes to reframe relationship between the public and private sectors, rewarding companies that transition from dependency and hopeless business models, while helping govts achieve fiscal sustainability.
· After a lengthy period of financial repression the era of global asset reflation appears to be reaching its inevitable conclusion.
· As the outlook for the global economy appears to be weakening, the prospects for the GCC economies may be getting better.
· Elevated oil prices have helped replenish state coffers and a flurry of policy initiative should revive economies.
The French Animal Healthcare Market is on the upswing boosted by growing disposable income, a rising number of pets, growing animal healthcare awareness, etc.Get detailed Business Analysis Infographic from Aranca.
Owing to IoT and increased customer preference for wearable gadgets, the Global Wearable Devices Market is expected to grow at a 21% CAGR during 2015-18. Get detailed market infographics on wearable devices market here.
The global market potential for Commercial Drones could be worth 2.1 billion USD by 2022. Know details on the future of Commercial Drone from Aranca's Market Research Experts.
The GCC Facilities Management Market - ArancaAranca
The rising demand of multi-billion construction projects is expected to fuel the growth of FM Market in the GCC region. Read on to know details from Aranca's Business Research Experts.
Brazil’s continuous and sustainable agricultural growth represents tremendous growth opportunity for the Brazilian Pesticide Market . Read on to know more from Aranca's Market Research Experts.
With the increased adoption of Cryogenic Equipment, a growth of 8% CAGR in the Global Cryogenic Equipment Market is anticipated. Read on to know details from Aranca's Business Research Experts.
With increase in urban population & investment in infrastructure sector, China's elevator & escalator market is expected to grow at a CAGR of 14%. Read on to know detailed forecast from Aranca's Business Research Experts.
Growing regulations regarding emissions, fuel efficiency and longing for light weight vehicle has increased the demand of Aluminum Automotive Sheets globally. Read on to know details from Aranca's Business Research Experts.
Indian Agrochemical Industry is expected to grow by a rate of 12 to 14% CAGR owing to the increased demand of food grains & supportive Government initiatives. Read on to know more from Aranca's Business Research Experts.
Weak currency, strong anti-corruption reforms, and stiff luxury taxes are forcing global luxury brands to rethink their expansion plans in one of the world's fastest growing consumer economies. Read more from Aranca's Investment Research Experts here.
Saudi Aramco IPO - A Reality of Mythical ProportionsAranca
Aranca's special report on Saudi Aramco IPO highlights its impact on industry, global investment banks and discusses the political and economic ramifications a large IPO may have. Download the report here!
Fatca high cost initiative to curb tax evasionAranca
Enacted by the United States Congress in March of 2010, the Foreign Account Tax Compliance Act (FATCA) is a federal law meant to deter tax evasion. Read details from Aranca's Business Research Experts here.
Winning shelf space private labels or fmcg brandsAranca
Consumer preference for Fast Moving Consumer Goods based on quality and affordability, in the high inflationary markets led to the emergence of private labels across geographies such as Europe, China, India, and the Americas.
Virtual currency has been a debated concept within the technology community in the past few years, as transactions through this medium do not require any third party’s involvement. Know more details from Aranca's Business Research Experts here.
Here we discuss the sectoral winners and losers for Patient Protection and Affordable Healthcare Act I (Obamacare) along with the key factors driving these trends due to Obamacare. Check out the Special Report on Obamacare from Aranca's Business Research Experts!
Therapeutic Vaccines for Alzheimer’s — Are We Close Enough?Aranca
Could a vaccine for Alzheimer's be a reality any sooner? Find more on Alzheimer Therapy Market Challenges from Aranca's Technology Intelligence & IP Research Experts.
Indian Telecom Tower Industry - Aranca ResearchAranca
India's telecom tower industry is expected to grow significantly owing to the Government's plans of providing high speed internet throughout the country. Read on to know more Aranca's Business Research experts.
Virtual Reality (VR) Industry has been through Ups & downs for around 3 decades but due to adaption of connected devices, it is expected to grow. Read on to know more details here.
Insurance Industry is Going to Soar in the GCCAranca
A positive economic outlook and several regulatory reforms are likely to drive the insurance industry in the GCC region. Know more from Aranca's Research Experts here.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
2. 2 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Report Prepared by: Prahlad Bhanushali, Rishiraj Agrawal, Ati Ranjan
3. Contents
Multi-billion dollar investment opportunity in KSA 03
Importance of Saudi Arabia as an investment destination 07
Tadawul providing a level playing field among many G-20 economies 13
Other markets performed well after liberalization 19
Conclusion: Opening of market to lure huge foreign investments 23
5. www.aranca.com // 5
An Aranca Special Report 2014
Multi-billion dollar
investment opportunity
in KSA
In July 2014, authorities approved plans to fully open the Saudi stock
exchange (Tadawul) to foreign direct investments (expected by 1H 2015).
The move is believed to be a precursor to the much-coveted inclusion
of Tadawul in the MSCI EM Index (likely to take place in 2017). Following
the recent upgrade of the UAE and Qatar to emerging-market status, this
could enhance MENA’s visibility among global investors, increasing its
weightage to 5.35% (including Saudi Arabia’s 4%) vis-à-vis 1.35% currently.
Given the scenario, global portfolio managers are expected to allocate
around USD40bn to Saudi Arabia. In addition to passive investment, we
expect a lot of active money to begin flowing into the Kingdom, given the
fundamental strength of KSA’s economy and stock market.
1
6. 6 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Saudi Arabia, the last G-20 country to open doors to foreign
investors
Saudi Arabia, the largest country in MENA by market capitalization and GDP, is the last
of the G-20 countries to open its stock market to full foreign participation. Except China,
where there is a cap on investments for Qualified Foreign Institutional Investor (QFII), all
other G-20 markets are fully open to foreign direct investments. Saudi Arabia’s market cap
to GDP ratio currently stands at 0.71, lower than the G-20 average of 0.79 and significantly
below that of the US (1.14), Japan (0.94), the UK (1.34), Canada (1.28), Australia (0.97), South
Korea (1.07) and South Africa (2.93). We believe opening doors to foreign investors would
bring the ratio closer to 1; our back of the envelope calculation indicates that deepening
of the market would mean more than USD150bn addition to market capitalization if the
MCap/GDP ratio improves by just 10 basis points.
0
3,000
10,000
20,000
USDbn
Figure 1: MCap to GDP ratio of just few G-20 countries greater than 1
Source: World Exchanges, IMF World Economic Outlook Database, April 2014
Inclusion in MSCI EM Index to attract significant inflows
Based on our preliminary calculations using funds benchmarked to the MSCI EM Index
and weightage based on market cap, we expect global portfolio managers to eventually
allocate about USD40bn to Saudi Arabia. According to the July 2014 MSCI EM factsheet,
funds aligned to MSCI indices totaled USD9trn. Considering the market cap approach
to calculate weightage, the MSCI EM has 12% weightage on MSCI; this translates to an
allocation of USD1trn. The MSCI Saudi Arabia Domestic Index has a free float market cap
of USD194bn from 45 constituents. Based on our calculation, this indicates roughly 4.7%
weightage on the EM Index; however, going by the market’s estimate, even if weightage
is around 4%, it represent a potential investment of around USD40bn.
Once included, Saudi Arabia would be among the top ten countries in the MSCI EM list of
23 nations, which is currently dominated by China (19.44%), South Korea (15.62%), Taiwan
(11.84%), Brazil (10.92%) and South Africa (7.51%).
7. www.aranca.com // 7
An Aranca Special Report 2014
Figure 2: Expected structure of MSCI EM after inclusion of Saudi Arabia
Top country weightage in MSCI EM:
⊲⊲ China – 19.44%
⊲⊲ South Korea – 15.62%
⊲⊲ Taiwan – 11.84%
⊲⊲ Brazil – 10.92%
⊲⊲ South Africa – 7.51%
⊲⊲ India – 6.84%
⊲⊲ Russia – 5.40%
⊲⊲ Mexico – 5.12%
⊲⊲ Saudi Arabia – 4%
(expected)
FUND BENCH-
MARKED
INVESTMENTOPPORTUNITY
INSAUDIARABIA
WEIGHTAGE
ASSIGNED
Corpus allocation
to MSCI Funds:
USD9.0trn
MSCI Index Market
Cap: USD33.6trn
MSCI EM Index Market
Cap: USD4.0trn
Corpus to MSCI EM
aligned based on
weightage i.e. 12%
Corpus allocation to
EM Funds : USD1.0trn
Weightage allocated
to KSA in MSCI EM
Index – 4%
USD40bn
Source: MSCI, Aranca research
Rapid strides toward inclusion in MSCI EM; likely by 2017
The three major criteria to enlist in the EM Index are economic development; having the
requisite size and liquidity; and market accessibility. Saudi Arabia is currently at par with
developed markets with regard to the first two parameters. However, it lags in terms
of market accessibility, particularly openness to foreign ownership and efficiency of
operational framework. In line with the aim to fully liberalize the Saudi market by 1H 2015
and bring it at par with international standards, authorities in KSA are taking steps aimed
at effective governance of market and building a trading technology framework, among
others. Therefore, we believe Saudi Arabia would be a part of the MSCI EM Index in 2-3
years, taking much lesser time than the UAE and Qatar (5–6 years).
CRITERIA FRONTIER EMERGING DEVELOPED SAUDI ARABIA
A. Economic development
Sustainability of Economic development No requirement No requirement GNI per Capita 25% > above World
Bank High Income threshold
DEVELOPED
B. Size and Liquidity Requirements
No of companies meeting the below criteria:- 2 3 5 DEVELOPED
Company size USD 449 mn USD 898 mn USD 1796 mn DEVELOPED
Security size USD 33 mn USD 449 mn USD 898 mn DEVELOPED
Security Liquidity 2.5% ATVR 15% ATVR 20% ATVR DEVELOPED
C. Market Accessibility Criteria
Openness to foreign ownership At least some Significant Very high FRONTIER
Ease of capital inflows/outflows At least partial Significant Very high DEVELOPED
Efficiency of operational framework Modest Good and tested Very high FRONTIER
Stability of institutional framework Modest Modest Very high EMERGING
Opening up of the market illus-
trates its commitment to attract
foreign investors
2008: UAE and Qatar first sought for inclusion in MSCI EM
2013: Announced approval
2014: Finally included
Figure 3: Saudi Arabia standing on par with the developed markets requirements on several parameters
Source: MSCI, Aranca research
9. www.aranca.com // 9
An Aranca Special Report 2014
Importance of Saudi
Arabia as an investment
destination
Saudi Arabia has come a long way in terms of developing its stock
market, a crucial determinant to achieving an ambitious target. The
country began to develop its stock market more than a decade ago,
focusing on fundamentals such as transparency, disclosures, insider
trading, and credit control, and recently switched gears focusing on
raising it to international standards. On the economic front, Saudi Arabia
remains the favorite among the G-20 nations, with stable GDP growth,
high fiscal surplus and low debt levels, among others. The Kingdom
scores high on other development parameters such as ease of doing
business, investor protection and raising credit. Moreover, given its
sovereign rating of AA- with positive outlook, the country is better than
many developed and emerging economies. Another interesting aspect
is that KSA is insusceptible to political crisis in the MENA region, as seen
during the Arab Spring.
2
10. 10 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Evolution of investment regime in Tadawul indicates strong
commitment to attract foreign capital
Robust institutional and regulatory framework and a proactive policy make Saudi
Arabia one of the most attractive markets for global investors. Since the handing over
of Tadawul’s supervision to a separate body (Capital Market Authority) in 2003, the
operational structure of the capital market has become robust, governance/transparency
has improved, and policymaking has become effective. The Capital Market Authority’s
strategy to transform the stock market, as it looks to gradually open the capital market to
foreign investments, can be summarized in three broad steps:
»» Removing irregularities in procedure and operations of the stock market, and focusing
on the size and depth of the market
»» Paving way for foreign investments, albeit indirectly
»» Undertaking initiatives to complete the liberalization of Tadawul
Figure 4: Development of Tadawul
Source: Capital Market Authority, KSA, Aranca research
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
…Going forward
2014 1H2015 2016 1H2017
⊲⊲ Authority of supervising
the stock market handed
over to CMA(Capital Market
Authority) from SAMA
⊲⊲ A lot of structural rigidities saw the
index reaching an all time high
⊲⊲ Major retail participation contributed to
increased volatility
⊲⊲ Increasingly stretched valuations led
to a severe correction with TASI losing
half its value
⊲⊲ Post correction, CMA adopted
3-pronged strategy; increasing market
size & depth, improving transparency
and rooting out insider trading
⊲⊲ FIIs allowed to participate directly through ETFs
⊲⊲ CMA starts working on regulation to allow QFII
⊲⊲ Full liberalization of Saudi Market and opening up
for foreigners
⊲⊲ Direct market access for
foreign participation
⊲⊲ Potential inclusion in MSCI
Emerging Markets Index
⊲⊲ Change in working days to Sunday-Thursday, brings
it closer to international standards
⊲⊲ Tightening regulations on loss-making companies to
reduce speculations
⊲⊲ Introduction of VWAP mechanism increases
institutional participation
⊲⊲ New corporate governance code
launched
⊲⊲ Foreigners allowed entry through swaps
⊲⊲ Earnings disclosures made mandatory
⊲⊲ FIIs allowed entry through swaps
⊲⊲ IB licenses issued to foreign
banks
⊲⊲ SAMA introduced measures
to reduce personal loan
leverage
11. www.aranca.com // 11
An Aranca Special Report 2014
Market begins to stabilize with the pick-up in reforms from 2009
The Tadawul witnessed two major instances of volatility during FY03–09. A number of
structural rigidities led to a run-up in prices which saw the Tadawul All Share Index (TASI)
reach a record high of 20,635, with heavy retail participation cited as one of the reasons
for the considerable volatility. Following the crash that wiped out nearly USD480bn and
reduced the TASI to less than half its value, the CMA wasted no time in adopting a three-
pronged strategy: increasing size and depth of the market, improving transparency and
rooting out insider trading. Having identified the need for foreign institutional participation
to reduce volatility, the authorities turned their focus on removing imbalances in the
market and attracting FIIs. Some of the steps included permitting foreign participation
through swaps, ETFs and changes in regulations to allow QFII. The second instance
was smaller in magnitude and related more to the global financial crisis of 2008. The
reforms that began with the partial opening of the market in 2009 decreased volatility
and culminated recently with the full liberalization of the Saudi market.
0
5,000
10,000
15,000
20,000
25,000
0
500
1,000
1,500
2,000
2,500
3,000
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14
SASEIDX Index - Volume (unit) SASEIDX Index - Last Price
Figure 5: Reduction in volatility from 2003 with the partial opening of the market in 2009
Source: Tadawul, Bloomberg
Saudi Arabia has sound economic fundamentals
Expected to continue growing at a decent pace
Saudi Arabia’s economy has grown at an impressive rate over the past few years.
Moreover, KSA is among the few countries that remained relatively immune to the global
financial crisis, clocking an average GDP growth of 6%, third only to India and China. The
IMF expects KSA’s real GDP to continue growing at a modest (4–4.3%) but higher rate
than advanced economies (2.3%).
416
520
429
527
670
734 745 773 791 816
850
889
932
6.0%
8.4%
1.8%
7.4% 8.6%
5.8%
3.8% 4.1% 4.2% 4.2% 4.2% 4.2% 4.3%
2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E
Nominal GDP (USD bn) Real GDP % growth
Figure 6: Nominal GDP (USD bn) and Real GDP Growth % growth (2007–19E)
Source: IMF World Economic Outlook Database, April 2014
12. 12 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Favorable demographics key to sustained economic growth
With 65% of its total population below 34 years old (median age: 26 years), strong
demographics is an important underlying strength of Saudi Arabia; this, we believe, is the
key to sustained economic growth. Over the last few years, the Saudi government has
laid emphasis on tapping the potential of its burgeoning youth population by spending
on education and related areas (expenditure on education accounted for nearly 25% of
2013 budget; highest in the world) and simultaneously taking steps to boost employment
in the private sector through various labor reforms.
8.3 8.8 8.9 8.5 8.3 8.1 7.9 7.7 7.4
10.2 10.6 11.3 12.0 12.1 12.3 12.2 11.7 11.5
5.8 7.0 7.6 7.9 8.2 8.6 8.8 9.1 9.4
2.3
3.1
3.9 5.1 6.4 7.0 7.4 7.7 8.1
0.8
1.0
1.4
2.0
2.6 3.5 4.7 6.0 6.8
2010 2015E 2020E 2025E 2030E 2035E 2040E 2045E 2050E
PopulationinMn
0 to 14 15 to 34 35 to 49 50 to 64 65 & Above
Figure 7: Favorable demographics for sustained economic growth
Source: World Bank Database
Fiscalsurplus,despiteexpansionaryspendingpolicy,ledbyinfluxofpetrodollars
Saudi Arabia is expected to record a fiscal surplus for the fifth consecutive year in
2014 due to high oil prices and growth in oil production—oil revenues are expected to
total USD329bn. This has enabled the Saudi government to maintain an expansionary
fiscal policy to diversify the economy from oil. Therefore, despite the economy’s heavy
dependence on oil revenues, the non-oil sector’s contribution to GDP has risen steadily,
standing at 53% currently from 44% in 2008.
194
315
154
219
318
369
331 329
131
151
172
208
238
262 269 274
2007 2008 2009 2010 2011 2012 2013 2014E
Government Revenue (USD bn) Government Expenditure (USD bn)
Figure 8: Government revenue and expenditure
101 109
127
144
155
184
219
131
151
172
208
238
262 269
2007 2008 2009 2010 2011 2012 2013
Budgeted (USD bn) Actual (USD bn)
Figure 9: Budgeted vis-à-vis actual spending
Source: IMF World Economic Outlook Database, April 2014
13. www.aranca.com // 13
An Aranca Special Report 2014
Saudi Arabia’s current account balance (CAB) is one of the largest in the world due to
its dominance in oil export. The country’s CAB, as a percentage of GDP, of 17% is well
above that of developed economies such as the US (-2.7%) and UK (-3.8%) as well as
emerging markets such as Brazil (-2.4%), China (2.3%) and India (-4.9%). Saudi Arabia has
also brought down its debt to low single digit over the years; it currently stands at just
3% of GDP.
211
233
313
192
251
365
388 376
70
90
115
96 107
132
156 168
0%
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010 2011 2012 2013 2014E
Exports (USD Bn) Imports (USD Bn) CAB (% of GDP)
Figure 10: KSA’s CAB one of the highest in the world
71
63
60
45
36
26
20 20
17%
12%
14%
8%
5%
4%
3% 3%
2007 2008 2009 2010 2011 2012 2013 2014E
Public Debt (USD bn) As % of GDP
Figure 11: KSA’s debt levels reduced drastically
Source: IMF World Economic Outlook Database, April 2014
Investor-friendly environment enhancing competitive strength
Saudi Arabia has a higher sovereign rating than most emerging markets; this reflects its
strong fundamentals. S&P has given Saudi Arabia an ‘AA-’ rating with a positive outlook,
just three notches below the maximum possible rating of ‘AAA’. Moreover, KSA scores
better in terms of ease of doing business, with strong investor protection laws and high
availability of credit, among a host of parameters. The raising credit parameter reflects the
collateral and bankruptcy laws that support lending and borrowing, whereas the investor
protection parameter indicates strength in three areas: extent of disclosure, extent of
director liability and ease of shareholder suits.
Prime – High Grade
(AAA to AA-)
Medium Grade
(A- to BB-)
Speculative Grade
(B+ to CCC-)
Figure 12: KSA’s sovereign rating just two notches
below highest
6 7
16
23 26
41
48 53
71
92 96
109
116
126
134
Figure 13: KSA among the most business-friendly
economies in EM
1
13
28 28
42
55
73 73 73
83 83 86
109 109
130
Figure14:GettingcreditinKSAeasiestinMENA(rank133)
4
10
22
34 34
52
68 70
80 82
98 98 98
115
128
Figure 15: KSA offers strong investor protection
Source: S&P, World Bank, Rankings taken from Ease of Doing Business Report 2014
14. 14 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Unaffected by social unrest in MENA
Saudi Arabia was largely unaffected by the Arab uprisings that swept the MENA
region. This was mainly due to the Saudi government’s ability to satisfy the needs of its
population. The Government of KSA implemented major labor reforms in 2011 that led to
an increase in employment as well as salaries of nationals, ensuring stability. Factors such
as economic development, satisfaction with the system of governance and emerging
nationalism have held the nation together during turmoil and otherwise; consequently,
investors are more confident about stability in the Kingdom.
Saudi Arabia
Oman
UAE
Iraq
Iran
Jordan
Algeria
Lebanon
Kuwait
Morocco
Bahrain
Yemen
Egypt
Libya
Tunisia
SyriaRegime dethrone
Civil war
Major protests
Governmental reforms
Minor Protest
No Impact
Figure 16: Impact of Arab Spring in MENA (Saudi Arabia vis-à-vis other countries)
Source: Aranca research
15. www.aranca.com // 15
An Aranca Special Report 2014
Tadawul providing a
level playing field among
many G-20 economies
Despite Saudi Arabia being an oil export economy, it offers investment
opportunities across several non-oil sectors such as petrochemical,
banking, telecom, food, retail, among others. We believe these
opportunities would continue to increase as the country diversifies its
economy further. The Saudi stock market (Tadawul) is fairly liquid and
the most active IPO market in the MENA region, both in terms of value
and listings. With just 169 listings, the market has an average monthly
turnover of USD49.5bn—over 68 stocks (or 40% of total) have a market
cap of more than USD1bn (and around 100 stocks with market cap of
USD0.5bn or more); this places it above the stock markets in several
G-20 nations. Furthermore, due to its low correlation with emerging
countries, the Saudi stock market provides investors with diverse options.
Therefore, we expect it to continue trading at a premium to the advanced
and emerging market group averages.
3
16. 16 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Economic diversification creating investment opportunities
across sectors
Saudi Arabia is an oil-driven economy, with the oil segment contributing more than 85%
to total revenues and approximately 47% to the Kingdom’s GDP. However, all companies
in this space are unlisted. Hence, the Saudi stock market provides investors exposure to
only non-oil companies across diverse sectors such as petrochemicals, financial, food,
retail, among others. There are 169 listed companies in the Saudi stock market, with the
financial sector having the highest free flow weightage, followed by petrochemicals and
telecom. We believe further diversification of the economy would unlock more growth
potential in the non-oil segment and benefit investors.
Saudi stock market above several G-20 peers
With an average monthly turnover of USD49.5bn, the Tadawul is at par with most G-20
peers; in fact, it is competitively placed with the likes of Brazil, South Africa and Russia.
The Saudi stock market’s share turnover velocity ratio is 1.1 vis-à-vis Brazil’s 0.57 and South
Africa’s 0.23. Furthermore, the Saudi stock market is fairly deep, with over 100 companies
(or 59%) and more than 68 companies (or 40%) of the total 169 having a market cap above
USD0.5bn and USD1bn, respectively. This is higher than the peer group average of 34%
and 24%, respectively. Therefore, attractive blue-chip offerings and market depth make
Saudi Arabia a lucrative destination for investments.
Non-oil
Oil
KSA Oil and Non-oil GDP No of Listed Cos. Avg. TurnoverFree Float Wt.
Financial Services
Food & Retail
Industrial
Construction
Cement
Petrochemicals
Telecom/IT
Metrics of Key Sectors in TASI Banking Petrochemical Food & Retail Construction & Cement Telecom
Sector Revenue (USD bn) 14.7 80.9 19.2 9.9 20.7
MCap as % of GDP 15% 21% 7% 5% 3%
Free Float MCap (USD bn) 61.4 51.1 28.7 25.1 10
No of Listed Cos 11 14 30 30 5
Daily Turnover (USD mn) 247 373 352 211 160
Volume as % of Total TASI 13% 16% 9% 8% 12%
Figure 17: Non-oil segment provides ample opportunities for investors
Source: Tadawul, Bloomberg
17. www.aranca.com // 17
An Aranca Special Report 2014
Country Stock Exchange MCap (USD
bn)
Avg turnover
(USD bn)
Share turnover
velocity ratio
No of Listed
Cos
No of Cos
MCap>USD 1
bn
No of Cos
MCap>USD
500 mn
Italy Borsa Italiana 698 83.3 1.25 360 80 101
Brazil BM&F Bovespa 1,100 55.7 0.57 369 117 160
Saudi Arabia Tadawul SE 530 49.5 1.1 169 68 100
Turkey Borsa Istanbul 223 31.4 1.8 231 40 72
South Africa Johannesburg SE 1,028 28.3 0.23 375 86 118
Russia Moscow Exchange 735 23.3 0.33 251 52 71
Mexico Mexican Exchange 530 13.1 0.3 142 68 84
Indonesia Indonesia SE 408 8.3 0.19 496 75 124
Argentina Buenos Aires SE 56 0.3 0.09 104 11 20
Average 590 32.6 0.65 277 66 94
Figure 18: Tadawul – Provides an excellent depth to investors
Source: Bloomberg, Aranca research
Robust IPO activity
Saudi Arabia is the largest IPO market in MENA, with 37 listings over the last five
years (2009–13), followed by Tunisia (23) and Oman (8). It is also the biggest in terms
of proceeds raised (USD5bn vis-à-vis USD0.5bn in Tunisia and USD1.2bn in Oman). Al
Hammadi Company for Development and Investment (in the retail sector) was the last
of the four IPOs in 2014 raising a total USD533mn (higher than USD523mn last year).
We believe the potential remains strong, with more than 35 family-owned businesses
in discussions with advisors for IPOs, and National Commercial Bank (NCB), the largest
Saudi bank, likely to go public later this year. Al Rajhi, the second largest bank after NCB,
has a market capitalization of USD30bn.
Figure 19: Saudi Arabia, largest IPO market in MENA (2008–14 YTD)
Source: Zawya, Aranca research
9,705
1,035 1,022
460
1,420
523 533
13
11
9
5
7
5
4
2008 2009 2010 2011 2012 2013 YTD 2014
Size of Offerings (USD mn) No. of IPOs
2008 2009 2010 2011 2012 2013 YTD 2014
Construction Consumer Goods Financial Services Food and Beverages Health Care Industrial Manufacturing Leisure and Tourism
Mining and Metals Petrochemical Real Estate Retail Telecommunications Transport
18. 18 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
An attractive alternative to riskier emerging markets
Saudi Arabia’s stock exchange provides significant diversification-related benefits to
global investors due to its low correlation of 27% and 47% (1-year and 3-year) with the
MSCI EM Index. Separately, Tadawul has a negative to low correlation with Russia, China,
Brazil and South Korea. However, its correlation with the US market is high at 87–94%,
given the dollar peg; we believe this bodes well for investors willing to bet on safe-haven
dollar-denominated investments, as seen during the emerging market currency turmoil.
96.8% 96.1%
92.8% 90.9%
86.7%
61.6%
47.3%
-62.0% -53.4%
13.7%
22.3%
90.0% 93.4%
94.6% 95.9%
93.9%
93.7% 91.3%
83.1%
26.8%
-53.6% -60.5%
-43.2%
54.2%
90.8% 92.5%
Qatar Dubai Abu Dhabi S&P DJIA FTSE MSCI EM Russia China Brazil Korea Taiwan South
Africa
1 Yr Correlation 3 Yr Correlation
Figure 20: Diversification benefits due to low correlation with MSCI EM
Source: Bloomberg, Aranca research
19. www.aranca.com // 19
An Aranca Special Report 2014
Strong fundamentals, growth potential warrant premium
valuation
The Saudi stock market’s return on equity (ROE) currently stands at 13%, higher than
that of MSCI EM and MSCI ACWI (12% each). Furthermore, according to the consensus
estimate, the earnings of listed Saudi firms would grow 13% in 2015, at a higher pace than
the expected 11% average for both emerging as well as advanced economies. Also, at
3%, the Tadawul’s dividend yield is higher than the 2.5–2.7% range for both MSCI EM and
MSCI ACWI. We believe these factors, coupled with strong macroeconomic fundamentals,
justify the premium valuation of 20x for the Saudi stock market versus 17x for MSCI ACWI.
US
China
Japan
Germany
France
UK
Brazil
Russia
India
Canada
Australia
Mexico
Korea
Indonesia
Turkey
Saudi Arabia
Argentina
South Africa
3%
6%
9%
12%
15%
18%
3.0x 6.0x 9.0x 12.0x 15.0x 18.0x 21.0x 24.0x 27.0x
ROE
P/E multiple
Figure 21: Saudi Arabia’s position among key developed and emerging countries
Source: Bloomberg, Aranca research
Size of the bubble
represents MCap
21. www.aranca.com // 21
An Aranca Special Report 2014
Other markets
performed well after
liberalization
Emerging markets such as India, Dubai and Qatar have witnessed positive
results in the form of increase in market capitalization, investments and
market activity after being opened to foreign institutional investors (FIIs).
While the Indian market benefited from improved trading infrastructure
and better corporate governance, which attracted a lot of FIIs, trading
activity across the UAE and Qatar indices surged following their inclusion
in the MSCI EM Index. Nine UAE and Ten Qatari stocks were included
in the MSCI EM Index, which witnessed higher foreign participation in
related sectors as well as increased foreign ownership in these stocks.
The Government of Qatar raised the FOL to 49%; this is expected to
result in higher foreign inflows and increase the weightage of Qatari
stocks on the MSCI EM Index.
4
22. 22 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
India: Stock market mainly driven by FIIs
Like Saudi Arabia, other emerging markets witnessed a boom in investments and market
capitalization after opening their doors to FIIs. India’s Sensex moved up to 26,000 from
merely 2,000 in two decades due to huge foreign participation. The Indian market
rose significantly after 2003 owing to the massive inflow of FII money following the
development of trading infrastructure and improvement in corporate governance.
4-Jan-93 3-Mar-95 29-Apr-97 26-Jun-99 22-Aug-01 19-Oct-03 15-Dec-05 11-Feb-08 9-Apr-10 5-Jun-12 2-Aug-14
Volume (mn) Sensex
1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-14
Turnover (INR cr) FII stake (%)
Figure 22: India: FII driving movement in index and volumes
Source: Bloomberg, Bombay Stock Exchange, National Stock Exchange, Aranca research
UAE and Qatar: Included in MSCI EM Index in May 2014
Trading activity surges, foreign ownership rises in selected stocks in UAE
The UAE index rose significantly, while trading activity increased nearly fourfold after the
country was included in the MSCI EM Index, the process for which began a year earlier
in June 2013. Notably, Dubai Financial Market (DFM) reached a five-year high in May
following the news of inclusion. In June 2014, four stocks of the Abu Dhabi Securities
Exchange (ADX) – First Gulf Bank, National Bank of Abu Dhabi, Abu Dhabi Commercial
Bank and Aldar Properties – and five stocks of DFM – Arabtec, DP World, Dubai Financial
Market, Dubai Islamic Bank, and Emaar Properties – were included in the MSCI EM
Index; this led to higher foreign participation in banking, financial services and real estate
sectors.
23. www.aranca.com // 23
An Aranca Special Report 2014
01-Jan-12 01-Apr-12 01-Jul-12 01-Oct-12 01-Jan-13 01-Apr-13 01-Jul-13 01-Oct-13 01-Jan-14 01-Apr-14 01-Jul-14
Volumeinmn
Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14
ADSMI DFMGI
Volumes quadrupled after
including in MSCI EM
Figure 23: UAE: Trading improves significantly after MSCI EM inclusion
Source: Bloomberg, UAE Stock Exchange websites, Aranca research
13.96%
15.41%
16.02%
15.88%
16.54%
20.52%
20.82%
21.13%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
2.76%
2.74%
4.26%
6.33%
6.89%
8.49%
8.98%
9.90%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
5.54%
5.73%
5.02%
4.96%
3.72%
3.66%
5.40%
5.31%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
8.66%
7.91%
9.62%
9.07%
8.78%
9.23%
11.07%
10.57%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
2.35%
3.10%
3.02%
3.03%
3.05%
3.03%
3.61%
3.68%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
11.96%
10.72%
13.09%
12.25%
13.67%
14.53%
17.35%
17.98%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
14.73%
14.90%
15.18%
15.19%
15.06%
14.65%
14.64%
14.96%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
7.32%
7.04%
7.39%
7.71%
8.79%
8.76%
9.00%
9.19%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
Abu Dhabi Commercial Bank
National Bank of Abu Dhabi
Dubai Islamic Bank
First Gulf Bank
Arabtec
Emaar Properties
Aldar Properties
Dubai Financial Market
Figure 24: UAE: Increase in foreign shareholding in companies included in the MSCI EM Index
Source: Bloomberg, Stock Exchange website, Aranca research
Qatar performs on similar lines
The Qatar Exchange (QE) index reached a lifetime high of 13,910 after inclusion of 10 stocks
in the MSCI EM Index in June 2014. Furthermore, foreign ownership grew significantly in
selected stocks. Recently, the government’s decision to raise the foreign ownership limit
(FOL) to 49% from 25% for listed companies strengthened investor sentiment. The rise
in FOL is expected to not only help the country witness foreign inflow of approximately
USD440mn but also increase the weightage of the index from 0.47% to 0.62% (higher
than the UAE’s 0.58%) on the MSCI EM Index in the near future.
24. 24 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
Jan/12 Apr/12 Jul/12 Oct/12 Jan/13 Apr/13 Jul/13 Oct/13 Jan/14 Apr/14 Jul/14
Volumeinmn
Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14
DSM
Before the announcement,
volumes averaged 90mn
After the announce-
ment, volumes surged
to 201mn
Figure 25: Qatar: Rise in trading value and volume after inclusion in MSCI EM
Source: Bloomberg, Stock Exchange website, Aranca research
4.31%
5.39%
5.26%
5.44%
5.82%
5.73%
7.44%
7.87%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
14.67%
13.07%
12.86%
12.72%
14.75%
15.22%
14.72%
15.00%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
14.33%
14.22%
14.06%
14.10%
13.96%
13.43%
16.11%
16.05%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
4.24%
4.52%
5.17%
5.22%
6.00%
6.53%
6.51%
6.58%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
7.04%
8.46%
8.65%
9.08%
8.92%
8.58%
8.79%
8.48%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
3.94%
3.75%
3.56%
3.46%
3.71%
4.35%
5.61%
6.06%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
7.23%
7.20%
7.08%
7.10%
7.37%
8.21%
9.33%
9.62%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
3.78%
3.73%
3.98%
4.08%
4.76%
4.33%
6.82%
6.91%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
6.05%
6.79%
7.40%
8.81%
10.61%
13.32%
12.00%
12.51%
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jun-14
08-08-2014
Doha Bank
Qatar Islamic bank
Al Rayan Bank
Vodafone Qatar
Qatar Industries
Commerical Bank of Qatar
Qatar Electricity & Water
Qatar National Bank
Barwa Real Estate
Figure 26: Qatar: Foreign shareholding in companies following inclusion in MSCI EM Index
Source: Bloomberg, Stock Exchange website, Aranca research
25. www.aranca.com // 25
An Aranca Special Report 2014
Conclusion: Opening
of market to lure huge
foreign investments
5
Saudi Arabia took a landmark decision in July 2014 to allow direct
foreign investment in Tadawul, the largest exchange so far restricted to
outsiders. The Tadawul has a market cap of USD530bn, but a relatively
lower MCap to GDP ratio of 0.71. On one hand, we expect the country’s
solid fundamentals to continue advancing on high oil prices, aided by the
government’s plan to diversify into the lucrative non-oil avenues. Capital
Market Authority, on the other hand, is laying emphasis on bringing up
its stock market reforms/policies/infrastructure at par with international
standards.
The Tadawul’s high credit rating, low correlation with peers in emerging
markets, and relatively higher earnings have made it a favorite among
investors. With monthly turnover averaging USD49.5bn and a velocity
ratio of 1.1, the Tadawul is at par with exchanges in several G-20 countries.
Moreover, more than 40% of companies listed on the Tadawul have a
market cap of above USD1bn (59%+ with MCap > USD0.5bn). It is, in fact,
the most active IPO market in the MENA region. The Saudi stock market
26. 26 // www.aranca.com
Market Liberalization in Saudi Arabia: Opportunities Galore for Foreign Investors
is also fairly diversified across non-oil sectors, and this is expected to
grow as it continues to focus on economic diversification.
Capital Market Authority expects the new rule to take effect some time
in 1H 2015; our back of the envelope calculations suggest that the
market cap could increase by USD150bn if MCap/GDP ratio improves
by just 10bps. In our opinion, this is very significant, especially given
that the Saudi market is likely to be included in the MSCI EM Index in
2017. A quick analysis of India, UAE and Qatar reveals that these nations
significantly benefited – in terms of market activity (volumes, turnover,
index movement) as well as rise in foreign ownership – after opening
their stock market to foreign investors. We foresee the same results for
Saudi Arabia.