Is the Saudi Arabian equity market the last emerging market frontier?

The Saudi Arabian equity market, the Tadawul, has recently begun the process of easing access for foreign investors. A late entrant on the global equity scene, the market itself is not something to be scoffed at, being larger than the likes of the Mexican, Russian, and Indonesian equity markets in terms of market capitalization. And this is without the Saudi oil firms, which are state-owned. However, there are some significant restrictions on foreign investment such as limits on the minimum asset size a firm should have, the percentage a foreign investor can own in any one stock, and the T+0 settlement period which is a challenge for any foreign investor. The opening up has been a gradual process. Some investors such as HSBC have shown their hand by moving early, but most leading global investors seem to be taking a wait and see approach. Also, some foreign institutional investors are in the process of completing their application for the Qualified Foreign Investor license. So while it will be some time before the Tadawul becomes as important as some of its other emerging market counterparts in the international context, it seems to fit the bill of the last frontier for global investors among the large emerging markets. A possible bright spot for an asset class that has been under the weather of late..