Saudi Shares Rise Most in World on Foreign Investor Access Plans

Saudi Arabian stocks advanced the most in more than a month after the market regulator said the Arab world’s biggest stock exchange is on track to open to foreign investors in the first half.

The Tadawul All Share Index jumped 2.4 percent in Riyadh to close at 8,686.16, the strongest level since Dec. 29. The gauge was the top gainer among more than 90 indexes tracked globally by Bloomberg. Saudi Basic Industries Corp., a petrochemicals producer that has the second-biggest weighting in the index, led 150 risers with a 6.4 percent gain, the most since Dec. 21. Thirteen stocks fell and six were unchanged.

The Capital Markets Authority has issued draft laws and is assessing investor feedback before it approves the regulations and sets an official date for reducing restrictions on direct participation of foreign investors, Governor Mohammed Al-Sheikh said at a conference in Riyadh yesterday. This indicates there won’t be a change of policy after a new monarch ascended to the throne following King Abdullah’s death on Jan. 23.

“The move today is due to CMA saying that the Saudi market is opening soon to the foreign investors,” Mahmood Akbar, a Riyadh-based equity analyst at NCB Capital, said by phone. “It has lifted investor sentiment and has prompted buying in the market.”

The world’s biggest oil exporter is removing barriers to one of the world’s most-restricted major stock exchanges as it pursues a $130 billion spending plan to boost non-energy industries. Investors from outside the six-nation Gulf Cooperation Council aren’t allowed to invest directly in stocks and have to get access to the market through equity swaps and exchange-traded funds.

Saudi Arabia could open the stock exchange in April, three people briefed on the country’s plans said in December. Opening the market may prompt MSCI Inc. to include the bourse in its emerging-market gauge by 2017, luring as much as $40 billion of foreign cash, Schroders Plc. said in July.

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