Watch: How confident are investors with the new Saudi bankruptcy law?
Awad Capital founder and CEO Ziad Awad discusses Saudi Arabian reforms. He speaks on “Bloomberg Markets: Middle East.”
There is more evidence Saudi is aiming to attract foreign investors, including approving the bankruptcy legislation that provides measures for restructuring and settlement procedures.
Current bankruptcy laws do not currently exist in the region’s largest economy making it difficult for companies to restructure debt.
“It’s another key step in the right direction directed at the business sector,” said Awad.
“It encourages entrepreneurship, provides better credit standards, improved lending by banks, and creates a framework for putting companies in bankruptcy procedures to repossess their assets.”
He added that the perception of reform is quite high particularly from outside the region, but investors are cautious expecting short-term pain especially in the consumer sector.
“”But they sure have a more positive medium to long-term outlook where gains can be made, however they now remain very selective how they place their bets both in equities and debt,” said Awad