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Tadawul urged to treat GCC and Saudi citizens equally

JEDDAH — The Saudi Capital Market Authority (CMA) has urged Tadawul (stock market) to treat GCC citizens and Saudis equally.

The Authority, in a statement, said lifting the remaining restrictions on GCC citizens that they will be subject to the rules and conditions that are applied on Saudis in the ownership and exchange of stocks in the market.

Citizens of Qatar, Kuwait, Bahrain, Oman and the UAE had been allowed to invest in Saudi stocks except for banks and other financial services. The CMA statement was carried by the Saudi Press Agency (SPA).

Saudi Arabia forbids other foreigners, except those who reside in the kingdom, from investing directly in the market, though they can invest through funds.

Meanwhile, according to SABB's report, corporate earnings for all listed companies in second quarter of 2007 were healthier than they were in first quarter of 2007, with only the industrial sector witnessing a slight decline (four per cent) over the previous quarter. Year-on-year earnings were, however, slightly down (by 0.6 per cent), but as compared to first quarter of 2007 were up by 12.5 per cent.

The report said that the banking sector, which was acutely affected by the stock market collapse in Q1-2007, appears to be on a recovery path. The second quarter earnings compared to those of previous quarter were up by 2.9 per cent, although if compared, year-on-year bank earnings were down 17.2 per cent.

In the next two quarters SABB expects banks' earnings will see further growth. The well-established banks are not as yet feeling much competition from the newly licensed banks and other new financial institutions. However, over time the financial services sector will evolve as competition increases.

However, the SABB report said that the Saudi banking sector is set to change in the coming decade as indigenous banks embark on cross-border, mainly regional, acquisitions. Nevertheless, due to the lack of local human resources in the local banking sector, they may well opt simply for minority stakes, only seeking majority positions over time.