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Tue 16 Mar 2010 09:22 PM

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Saudi Arabia approves first ETF open for foreigners

World's top oil exporter has been trying to encourage more foreign money to its bourse.

Saudi Arabia has approved the Gulf Arab state's first exchange traded fund, which will be accessible to foreigners as part of efforts to open up the biggest Arab bourse .

Saudi financial firm Falcom Financial Services won approval to list the "Falcom Saudi Equity ETF" on the bourse, the capital market authority said in a statement on Tuesday.

The world's top oil exporter has been trying to encourage more foreign money to its bourse, having recently allowed indirect foreign ownership via so called swap agreements.

Analysts say the move might coax big international investors to enter on a larger scale.

ETFs usually track an index and can be traded like securities.

CMA head Abdulrahman al Tuwaijri has said in a newspaper interview Saudi Arabia wanted to further open up the bourse by launching ETFs this month without allowing risky "hot" money to flow in, hinting that full ownership was not on the cards.

The move coincides with a campaign by the regulator against insider trading, which has involved heavy fines on banks and the withdrawal of financial licences. (Reuters)

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