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Equity market set for a boost

A new capital markets law, continued privatization and an eventual opening up to foreign investors should boost Saudi Arabia's equity market.

Saudis are buying and using cellphones in record numbers.

KHALID AL-MOLHEM, president of Saudi Telecom (STC), has the air of a contented man as he ticks off the past year's successes, which include a successful privatization of 30% of the company, the completion of his corporate restructuring plans and an expansion of the mobile business that has seen Saudis buying and using cellphones in record numbers.

STC's share price has more than doubled since its flotation last December. And in the first six months of this year the company's shares have accounted for almost a quarter of trades on the Saudi Stock Exchange (Tadawul), which at present is not open to international investors.

"Before the flotation, the company was valued at SR51 billion, which already made it the largest company in the region, and it is now worth SR117 billion ($30.8 billion). In terms of size we are number 14 in the world and, among the emerging markets, we are second only to China Mobile," says Al-Molhem.

STC is now well placed for the competition that could come in the mobile market as early as next year and for landline business in 2008.

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