Saudi Stock Exchange
Saudi stocks and the usefulness of its investment
The oil-rich Saudi Arabia had opened Saudi stocks market and it is considered as the largest market in the Middle East. Access to invest in the Saudi stock market was under strict control by government for foreigner investors but now it’s likely to be a gold mine for global investors with their quest for entry to one of the richest countries in the world.
Despite the intention to allow foreign investment in Saudi stock being a subject of study for at least a decade, the government has finally decided to proceed under series of liberal progressive reforms under the influence of urbanization of the state by King Abdullah bin Abdul-Aziz Al Saud.
In the past, investors were able to access the Saudi market indirectly through certain platforms such as investment funds but it is expected that the new rule will open the ways for direct access to Saudi stocks and to the most valuable companies in the kingdom.
Saudi stock prices have risen more than 46% during the past two years, driven with heavy weight and volume of the market capitalization in the range of $530 Billion.
We will talk about the guidelines to add Saudi stocks to your portfolio.
1. Saudi Arabia is the world's largest oil exporter and the largest owner of the world's largest oil fields. The Saudi Kingdom has oil reserves for excess levels of 250 billion barrels and will continue to pump oil for a long time even after the drought regions such as the North Sea and with these opportunities; investment in the Saudi stock exchange may represent the best way to gain access to this sector.
2. Saudi Arabia is the largest economy in the Persian Gulf with population distribution similar to Arab countries of the Gulf Cooperation Council (GCC). Service industries such as mobile communications thrive strongly, with the widespread usage of two phones instead of one. Recently, investors should monitor STC stock and follow-up Saudi stock prices, which considered as the largest mobile operator in the GCC Gulf in terms of market value. And the company has recently announced increase as much as 96 percent in the second-quarter earnings.
3. Dividend payments in the Saudi stock today are almost guaranteed, supported by oil prices above $ 100/barrel and strong growth of profits in the corporate sector. On Tadawul index; Saudi companies has printed the highest annual profit in its history last year, equivalent to 103 billion riyals (16.1 billion pounds). And it is likely to be pardoned yield of taxes with the fact that Saudi Arabia Investments area is out of the country for international investors, Kingdom does not impose directly income tax on locals or expatriate manpower.
4. Banking sector in Saudi Arabia is not considered an appropriate field for the faint hearted. With banks suffering in KSA along other banks in the rest of the Middle East, Arabian Gulf is dealing with the aftermath of the collapse of the real estate market, and fueled by debt started in Dubai.