Ownership Structure in Saudi Stock Market

The project aims at understanding the structure of ownership in Saudi stock market. Ownership structure, i.e. who owns what of the corporation, varies significantly across corporations and researchers as well as policy makers have been long interested to understand what impact this variation may have on the effectiveness and the efficiency of the equity market. For example, questions like: - how much government related entities own? - what is the impact of foreign investors on Saudi Stock markets? - why stocks have different ownership structures? - why some stocks are preferred by institutional investors or foreign investors? - what role individual investors, institutional investors and foreign investors may have on stocks tradability company performance and price (co-)movement? These questions are very important ones for better understanding of equity market dynamics. Though these questions have long been investigated in developed and major developing countries, little is known about them within the Saudi context. Our investigation shall be an empirical one. The project design shall depend on collecting data on the ownership structure (who owns what) of each company in Saudi stock market and investigates the relationship between ownership structure, performance and price movement and co-movement. We are not aware of any work that Page 2 | Template for Center Internally-Funded Projects used disaggregated date at the company level to investigate such relations. Also, a careful design of the empirical strategy is at the core of our investigation. Using ownership structure (OS) as an explanatory variable to outcomes like corporate performance and capital structure poses a challenge of isolating OS impact from other confounding factors. Being novel in data and methodology, the project shall set the stage for further discussion, both among policy makers and researchers, on the topic