RIYADH, March 25: Saudi stocks fell on Saturday, with brokers reporting little sign of the kingdom’s foreign residents taking advantage of rules that allowed them to invest directly in the market for the first time.

Saudi Arabia opened the Arab world’s largest bourse to its 6 million foreign residents as part of a drive to inject liquidity into a market that has lost about a third of its value in the past month.

But the morning session on Saturday, the day the new rules took effect, saw the all-share index drop 2.67 per cent to 15,471.18 points with key blue chip stocks falling sharply.

Turnover was around 4 billion riyals ($1.07 billion), about 10 per cent of the daily average before the slide began in late February, ending a rally driven by record oil revenues that made the bourse one of the world’s most expensive emerging markets.

“There is no liquidity in the market and there are only offers, no bids,” said Abdelmounaim Addas of Abalkhair Financial Consultancy.

He said he saw little sign of trading by foreign residents. Given the status of the market I don’t think they will invest, Addas said.

Foreigners in Saudi Arabia earn about $35 billion a year and until now were only allowed to invest in stocks through mutual funds.

Wadah Al Taha, head of strategy at Dubai-based Emaar Financial Services, said red tape was getting in the way of foreign investment. It will be at least Monday by the time some of the paper work is sorted out, he said.

The day’s trading focused primarily on the four largest listed companies.—Reuters