Saudi Arabia may give foreigners leeway to invest in stocks

Saudi Arabia may allow foreigners to invest directly in stocks in the next year, said John Burbank, founder of the US$3.7 billion hedge fund Passport Capital LLC.

"The place that we probably have by far the biggest weight relative to other people would be Saudi Arabia, which is our favorite emerging market," Mr Burbank said. Passport has about 17 per cent of its capital invested in the Arab world's largest bourse. "We think the market's going to open up in the next year."

Direct foreign investment in Saudi stocks would attract $25bn to $30n in inflows, Mr Burbank said. The kingdom, which said it will open the market gradually, allows non-resident foreigners to invest in shares through equity swaps and exchange-traded funds. Foreigners account for about 2 per cent of investments in the bourse, Mr Burbank said.

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