Saudi Arabia is going to allow foreign investors onto its stock exchange. The new rule is designed to bring foreign money into the Saudi economy. But foreign investors will have to buy through a licensed intermediary, who would technically be the owner of the shares. Stephanie Grimmet in Today’s Financial News says she won’t be rushing in to invest quite yet…

Yep, that’s the plan. It’s been endorsed by the Capital Markets Authority (the Saudi version of the SEC), and it’s going to become legal sometime soon.

Let’s see, I’m supposed to give my money to some investor I don’t know in a country that has a sensitive and delicate relationship with my own (and may or may not be facilitating organizations that want to destroy my country’s government and economy and massacre its population). Gee, that sounds safe.

The new rule is designed to bring foreign money into the country’s economy… because Saudi Arabia doesn’t get enough of that with all of the oil it deigns to sell the rest of the world.

And that oil may be the main reason it’s taken so long for the country to open its market. After all, why would a wealthy nation with a self-satisfied ruling class bother with the headache of foreign investors if it didn’t have to? It took peer pressure from other Arab states (and the U.S., probably) to finally impell the country to take this step toward an open bourse, to the delight of many international investors.

Up until now, foreign investors could only access the Saudi exchange through a few select funds. And you know that, despite any risk we may see in reaching into the Saudi cookie jar, many investors are greedy and confident enough to stick both hands in and grab as much as they can hold at the first chance.

The stock exchange, called the Tadawul, is the largest Arabian bourse, and it could make the first brave souls willing to risk their money on a brave new world very rich. But personally, I’m going to sit back and wait a few months (or years) to see how the whole plan shakes out… and maybe learn Arabic to make sure I’m not being swindled by some guy who claims to be a “;licensed intermediaries.”;

Source: Saudi Arabia’s Tadawul Opens to Foreign Investors