Goldman Sachs was the top brokerage firm operating in Saudi Arabia in May for the first time, data compiled by the Saudi bourse showed. The company accounted for 18.6 percent of trades by value and also ranked first in the list of transactions, making up 2.3 percent of the total trades on the Saudi Stock Exchange (Tadawul) last month.
HSBC Saudi Arabia moved up to second place, accounting for 9.4 percent of total trading in May, followed by NCB Capital and Al Rajhi Capital, which have traditionally been top brokers in the domestic market.
Goldman Sachs secured a license to trade equities in Saudi Arabia back in 2017, joining other western investment banks that have been looking to tap new opportunities since the government unveiled reforms to attract foreign capital. Global firms such as BlackRock, Citigroup, and HSBC have since been among those to join the list of institutional investors that can directly trade the market.
Among the reforms, the minimum value of assets under management needed for an institution to qualify as an investor fell to $500 million from $1 billion.
Saudi exchange opens itself to foreign investment
Saudi Arabia has also simplified requirements for qualifying the affiliates of institutional investors, with their subsidiaries and managed funds now could be approved without submitting a separate application for each of them.
The CMA also recognized a wider range of other regulatory jurisdictions as acceptable to Saudi Arabia. Earlier in April, the securities regulator granted Riyad Capital its approval to offer forex trade services, which was the first forex broker license in Saudi Arabia.
Foreign investors were originally allowed to start investing directly in Saudi Arabia’s stocks market in 2015. The CMA reduced minimum requirements for the institutions in 2016 and is now proposing a fresh round of reforms, as Riyadh seeks to draw more capital into the market before the listing of state oil giant Saudi Aramco.
Saudi Arabia’s reforms are part of Vision 2030, an economic reform plan aimed at reducing historical high dependence on oil by diversifying the country’s economy and transforming how the kingdom generates public income.