Saudi Arabia is expected to allow foreign investors to invest directly in its $340 billion stock market for the first time later this year, the Financial Times reported.

The newspaper said the Middle East's biggest economy and the world's largest oil exporter has been sounding out local and international banks and leading asset managers on the best way to open the market.

The FT cited Sam Vecht, a senior emerging-markets fund manager at BlackRock, as saying international access to the Saudi stock market could happen 'as early as the first half of this year or even the first quarter'.

Market liberalisation has been rumoured for several years, but the Saudi authorities finally look set to open the door for international funds, according to the piece published on the FT's website.

One model under discussion is China's 'Qualified Foreign Institutional Investor' arrangement, which allows foreign-based funds to access the mainland bourses, two unnamed bankers are cited as saying in the article. -Reuters