June 10, 2019 / 4:01 PM / in 17 days

UPDATE 1-Goldman was top broker in Saudi market in May as foreign interest surged

(Adds detail, Goldman comment)

By Saeed Azhar and Hadeel Al Sayegh

DUBAI, June 10 (Reuters) - Goldman Sachs was the Saudi market’s top broker by trading volumes and value in May, stock exchange data showed, as foreign banks benefited from a surge of international money into the kingdom.

Foreign investment interest in Saudi Arabia picked up ahead of the inclusion of the country’s stock market in global index provider MSCI’s emerging market indexes last month.

Goldman, which was not even among the top 10 brokers in Saudi Arabia in April, handled 18.6% of trades by value and 12.3% by volume in May, data from the Tadawul bourse showed.

It was followed by HSBC Saudi Arabia, which handled 9.4% of trades by value last month.

“This ranking is a reflection of our international client base’s confidence in Saudi Arabia – in its stock market, economic prospects and the 2030 Vision economic plan,” said Khalid Albdah, CEO of Goldman Sachs Saudi Arabia.

In 2017 Goldman received approval to trade equities in Saudi Arabia, joining a growing band of western investment banks and fund managers expanding in the kingdom.

Goldman has been on a hiring spree since gaining its Saudi equities trading licence in August 2017 and has added about seven people to its Saudi sales trading team.

“They managed to make inroads to both local and foreign businesses,” one financial industry executive said.

Of the 10 top brokers in May, five were foreign, the data showed.

Goldman was a joint financial adviser for the initial public offering (IPO) of Arabian Centres, which listed last month. The offering was the kingdom’s first IPO under its Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the United States.

Goldman also acted as a stabilising agent for the company after it began trading, buying its shares on the market.

Saudi securities firms such as NCB Capital and Al Rajhi Capital have traditionally been the leading brokers in the domestic market, which first opened to foreigners in 2015.

Late last month the Saudi equity market joined the first phase of passive fund inclusion in the MSCI Emerging Market Index, which is expected to trigger billions of dollars of foreign fund inflows.

In May foreigners bought a record 17.62 billion riyals ($4.7 billion) of Saudi stocks, according to Saudi stock exchange data. Foreign ownership of Saudi stocks stood at 6.6% at May 30, the data showed.

The Saudi index has gained mopre than 12% this year, placing it among the Gulf region’s best performers. ($1 = 3.7501 riyals) (Reporting by Saeed Azhar and Hadeel Al Sayegh Editing by Mark Potter and David Goodman)

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