CMA to allow foreigners to hold majority stakes in local firms: Report

The Capital Market Authority (CMA) is moving toward allowing foreigners to own majority stakes in local companies, Bloomberg reported.

The Authority is close to approving a major amendment to raise the cap on foreign ownership in listed companies, which currently stands at 49%, the agency quoted CMA board member Abdulaziz Abdulmohsen bin Hassan as saying.

He highlighted that the regulator is almost ready for this step and is awaiting approval from the relevant government entities. “It is prepared to move forward,” said the official, without specifying the final ownership cap that will be permitted for foreigners, expecting the decision to come into effect before the end of this year.

Allowing foreign ownership to exceed 50% of capital in listed companies will increase the relative weights of Saudi stocks in MSCI indices, which could attract significant capital inflows, as these indices reduce the weight of companies that impose foreign ownership restrictions.