According to a leading Dubai-based investment banker, more foreign investment should be allowed to enter Gulf bourses by local authorities in order to replace the largely speculative retail capital that is quickly departing.
Chief executive of Rasmala Investments Ali Al Shihabi said that government intervention to support prices, would work only in the short term, according to <i>Reuters</i>.
Earlier in the week Gulf authorities lifted Saudi shares off eight-month lows after having fallen 18 percent in five trading days.
"The only structural move that can fundamentally change this model today would be to allow full and unencumbered foreign investment in local markets," said Al Shihabi.
"Foreign institutions would like to get in and they will be the only ones with sufficient volumes to replace the local retail investor who will disappear from this market for a good while, licking his wounds," he added.
