Saxo to Add Saudi Arabia Equities on $603 Billion Market Opening

Saxo Bank, the online Danish bank, plans to add Saudi Arabian equities to its trading platform after the country said that it expects to open its $603 billion exchange to direct foreign investment next year.

The bank is also seeking to add equities in the United Arab Emirates, Egypt and Qatar to its online trading products, Jakob Beck Thomsen, the Copenhagen-based bank’s head in Dubai, said yesterday in an interview. Saxo Bank will start looking to add Saudi Arabian equities early next year, he said.

The largest Arab economy will begin allowing foreign investors to hold as much as 10 percent of the market’s value in the first half of 2015 under draft regulations announced by the Capital Market Authority on Aug. 21. The move could result in Saudi Arabia’s stock market being added to the MSCI Emerging Market Index and receiving as much as $40 billion of inflows, according to John Burbank, founder of Passport Capital.

“Adding Saudi equities has gone from being something we were assessing to being something we definitely want to do,” Thomsen said.

Unlike traditional private banks, which receive fees for on assets under management, Saxo Bank generates income from each trade on its platform. The bank is increasingly targeting institutional clients after profit slumped 86 percent in 2012 and expects about half of the its clients in the Middle East to be institutions by the end of this year, Thomsen said.

Saxo Bank had put off adding U.A.E. equities to its trading products because it was waiting to see if a planned merger of the Dubai Financial Market and the Abu Dhabi Securities Exchange. It’s now decided to add them as the merger does not appear to be going ahead, Thomsen said.

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