The value of shares bought by foreign investors through swap arrangements on the Saudi stock exchange jumped in July, official statistics showed on Sunday.

Authorities in the kingdom granted long-awaited approval on July 21 to open up the bourse to direct foreign investment for the first time in early 2015.

Foreigners currently can only purchase shares through swap arrangements, contracts in which a local broker or investor owns the stock on the foreign party's behalf and passes on cash flows from changes in stock price and dividends.

These contracts have attracted limited volumes because of their cumbersome structure and higher cost compared to direct ownership.

However, in July the value of shares brought by foreigners through swap agreements increased to 3.53 billion riyals ($941 million), according to bourse data published on Sunday, from 1.66 billion riyals in June.

The rise is despite the total value of shares traded on the entire exchange dropping 31.8 percent month-on-month to 122.75 billion riyals.

"People want to get in until the time direct foreign ownership actually happens, because then the prices may not be that attractive any more," said Farooq Waheed, senior portfolio manager at Riyad Capital.

"The local reaction is very positive, especially on large-cap stocks that are likely to be interesting for foreign investors."

Saudi's stock market, or Tadawul, has risen 5.7 percent since the direct foreign ownership announcement - although there have been only four days of trading because of the week-long Eid holiday during the last week of July.

Saudi Basic Industries Corp, the largest stock in the Middle East by market capitalisation, has jumped 11.7 percent in that period. -Reuters