Saudi Arabian sharia-compliant investment bank Alkhair Capital expects to expand its $2 billion of assets under management by 10 per cent annually as it attracts foreign investors to the kingdom, its chairman said.

Alkhair, which is 53 per cent owned by Bahrain-based Islamic wholesale lender Bank Alkhair, has been operating in the Saudi market since 2009.

It opened an office in the Dubai International Financial Centre last month.

"Dubai is a gateway for Gulf markets and international investors," Yousef Al Shelash said. "We are based in Saudi Arabia but we want to attract a new range of investors and diversify our sources of funding."

Direct foreign investment in the Saudi stock market is still prohibited, but foreigners can invest indirectly via swaps and exchange-trade funds.

The government has been preparing to permit direct investment but a date has not been set.-Reuters