Saudi Arabia may allow foreigners to invest directly in stocks in the next year, said John Burbank, founder of the US$3.7 billion hedge fund Passport Capital LLC.
"The place that we probably have by far the biggest weight relative to other people would be Saudi Arabia, which is our favorite emerging market," Mr Burbank said. Passport has about 17 per cent of its capital invested in the Arab world's largest bourse. "We think the market's going to open up in the next year."
Direct foreign investment in Saudi stocks would attract $25bn to $30n in inflows, Mr Burbank said. The kingdom, which said it will open the market gradually, allows non-resident foreigners to invest in shares through equity swaps and exchange-traded funds. Foreigners account for about 2 per cent of investments in the bourse, Mr Burbank said.
Investors are seeking access to Saudi Arabia as the government pursues a spending plan of more than $500bn in an effort to boost the non-oil economy. MSCI, whose gauges are tracked by investors managing $7 trillion, last year resumed Saudi coverage and said it would consider including the nation in frontier or emerging market indexes if it allows direct access to foreigners.
"What we're interested in is the domestic economy," said Mr Burbank, whose $1.3bn Passport Global fund rose about 3.4 per cent in January, according to a performance update to investors obtained by Bloomberg. "The kingdom is taking in so much revenue and redirecting it now into the domestic economy."
Saudi Arabia's economy grew 6.8 per cent last year after raising its 2013 expenditure target by almost a fifth to a record 820bn Saudi riyals. That beat the 5.6 per cent median estimate of 16 analysts compiled by Bloomberg. The growth rate is "pretty extraordinary in these times," Mr Burbank said.
Saudi Arabia's stock exchange has a market capitalization of 1.44tn riyals, compared with $120bn for gauges in the United Arab Emirates and $308bn for Turkey, according to data compiled by Bloomberg. Saudi stocks have a dividend yield of 3.5 per cent, compared with 2.7 per cent for the MSCI Emerging Markets Index.
Petrochemicals stocks in the kingdom are attractive given high margins, Mr Burbank said, without specifying which companies Passport is invested in. Saudi Basic Industries Corp, the world's biggest petrochemicals company, is poised to report a 15 per cent increase in 2013 profit, according to the average estimate of 14 analysts compiled by Bloomberg.
* Bloomberg News
Poacher
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New Zealand 57-0 South Africa
Tries: Rieko Ioane, Nehe Milner-Skudder (2), Scott Barrett, Brodie Retallick, Ofa Tu'ungfasi, Lima Sopoaga, Codie Taylor. Conversions: Beauden Barrett (7). Penalty: Beauden Barrett
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Korean Film Festival 2019 line-up
Innocent Witness, June 26 at 7pm
On Your Wedding Day, June 27 at 7pm
The Great Battle, June 27 at 9pm
The Witch: Part 1. The Subversion, June 28 at 4pm
Romang, June 28 at 6pm
Mal Mo E: The Secret Mission, June 28 at 8pm
Underdog, June 29 at 2pm
Nearby Sky, June 29 at 4pm
A Resistance, June 29 at 6pm
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The bio
Date of Birth: April 25, 1993
Place of Birth: Dubai, UAE
Marital Status: Single
School: Al Sufouh in Jumeirah, Dubai
University: Emirates Airline National Cadet Programme and Hamdan University
Job Title: Pilot, First Officer
Number of hours flying in a Boeing 777: 1,200
Number of flights: Approximately 300
Hobbies: Exercising
Nicest destination: Milan, New Zealand, Seattle for shopping
Least nice destination: Kabul, but someone has to do it. It’s not scary but at least you can tick the box that you’ve been
Favourite place to visit: Dubai, there’s no place like home
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
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JOKE'S%20ON%20YOU
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Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Pathaan
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners