The forex industry has taken quite a few hits recently in Europe and Australia as financial watchdogs have cracked the whip with stringent regulations that have limited the freedom that forex brokers once had. As a result, the global forex market has suffered in recent months but things are looking up.
Forex is becoming more popular with each passing day in the Middle East and North Africa (MENA) region. Forex trading is quickly becoming the investment of choice.
With new regulatory jurisdictions and laws still being developed, the MENA region might become the haven that forex needs to thrive.
Forex brokers and traders will be happy to know that Saudi Arabia is opening up to the forex industry and has recently issued its first license. The country has a population of 32 million and growing, making it a ripe market for forex brokers.
Riyad Capital is the first company in Saudi Arabia to get a forex broker license after its license was approved by the Saudi Capital Markets Authority. The company confirmed it on their official Twitter and the license was given during a local financial industry conference in Riyadh.
However financial analysts are not all that excited as they believe that Saudi Arabia will impose a lot of restrictions when it comes to issuing forex licenses. They point out that Riyad Capital is a subsidiary of the Riyad Bank. As the third largest financial institution in the country, the bank is invested in economic stability. Add to that the fact that the Saudi government owns 51 percent of the bank. They point out that the issuance of the forex license could have a lot of stipulations behind it, which the general public might not be aware of.
Saudi Arabia Will Maintain Tight Grip
This is why a lot of forex players are waiting for future moves to take place in the Saudi Arabian market. The question is whether the government will now start allowing other companies to secure a lucrative forex permit. Many are doubtful considering Saudi history. Though the country has opened up its markets, Saudi authorities still have a solid grip on the trading around the country.
One of the good signs is that the preparations for the IPO listing of Saudi Aramco, one of the country’s biggest state-owned companies is finally coming to an end. With the potential of raising 10 times the original projected bids, this may open up the country’s financial market a lot more. Additionally, there are plans for Saudi Arabia to enter the cryptocurrency industry as plans are in place for the launch of its own crypto token in conjunction with UAE authorities.