Deutsche Bank ready to offer access to Saudi stock market via swap agreements

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Deutsche Bank announced today that it is ready to commence offering its international clients access to Saudi Arabia’s stock exchange, the largest equity market in the Middle East.

Most Recently Saudi Arabia’s Capital Market Authority (CMA) took the groundbreaking decision to allow non-resident foreign investors to conclude swap agreements with authorized entities.  According to the CMA’s resolution authorized entities are to retain the legal ownership of the shares. Previously foreigners were denied access to the Kingdom’s stock market, except through mutual funds.

The swap agreements will be conducted through Deutsche Bank’s subsidiary in the Kingdom, Deutsche Securities Saudi Arabia, subject to final regulatory approval.

Henry Azzam, Deutsche Bank’s CEO in the Middle East and North Africa and Chairman of the Board of Deutsche Securities Saudi Arabia, said “We are delighted with the CMA’s historic resolution, which we believe will greatly enhance the depth and breadth to of the Saudi capital market. This development will undoubtedly increase foreign capital inflows to the Kingdom’s stock market, promote greater transparency, reduce volatility associated with dominance of the retail investors in the Saudi market, and encourage more comprehensive equity research on listed companies.”

Deutsche Bank opened its first branch in Riyadh in 2006.  In 2007, Deutsche Securities Saudi Arabia, a subsidiary of Deutsche Bank was granted a license by the Capital Market Authority of Saudi Arabia to offer brokerage and custody services, as well as arranging, advising and providing investment funds management.

Jamal Alkishi, CEO of Deutsche Securities Saudi Arabia, said “There is huge demand from international investors for entry into the Kingdom’s markets.  The Tadawul (Saudi Arabia’s stock exchange) has the largest number of blue chip companies in the Middle East, a market capitalization that stands around US$500bn, constituting approximately 1% of the capitalization of the global equity markets.  Deutsche Bank is fully prepared to offer its international clients its services in the Kingdom, as we have worked for a long time at establishing the necessary platform and mechanism.”

Ricardo Honegger, Head of Global Markets for the Middle East and North Africa, said “The opening up of the Kingdom’s markets to international investors will herald a new era for the strongest and largest economy in the Middle East, and we applaud the regulators vision in allowing international investors a golden opportunity to access a very attractive,  well diversified and the largest equity market in the region at a time of turmoil across international exchanges.”