Foreigners' sales of Saudi stocks outstrip their purchases for the first time this year
LONDON (Reuters) - Foreign investors' stock sales in the kingdom last week overtook their purchases for the first time this year as fund managers became increasingly concerned about high valuations of assets and stocks, the bourse data showed .
Foreign portfolio managers are pouring into the kingdom ahead of Riyadh's expected inclusion of emerging global emerging market indexes next year. In the week ending April 19, foreigners bought net worth of $ 384 million, a record amount .
However, the data showed that the week ended last Thursday saw sales of foreigners exceeded their purchases by 48 million dollars, they bought 313 million and sold at the equivalent of 361 million .
The Saudi stock index surged 13.8 percent this year driven by financial flows, which means it was trading 16 times more than corporate earnings in the past 12 months, while the MSCI Emerging Markets Index was below 15 Time .
Foreign investors, who indirectly invest in Saudi shares through swap deals, carried out a massive sell-off last week at a rate of more than two to one, data showed on Sunday .
However, the purchases of eligible foreign direct investment companies remain higher than their sales, indicating that newly licensed institutions entering Saudi Arabia continue to increase their portfolios .