Foreign investors to bring quality changes to Tadawul: Alistithmar Capital

The opening of the Saudi Stock Exchange (Tadawul) to foreign investors on Monday will gradually bring positive qualitative changes, such as more accurate investment decisions and reduced volatility in the market, Alistithmar Capital said in a report.

The brokerage firm said an increase in qualified foreign institutional investors (QFIs) is expected to buoy market efficiency and help narrow the gap between trading volumes and values.

Retail investors are currently estimated to account for 88 percent of total trading activity. Individual investors were said to have sold SAR 21.8 billion more in shares, compared to shares bought over the last year. 

The market has risen by 15.27 percent during this period, which is a sign that many individual investors did not capitalize on market growth. Accordingly, investment in shares through foreign institutions also grew through swap agreements.