Saudi stock exchange plans to launch single stock option in Q2 2023: CEO

RIYADH: At least 23 companies are preparing for an IPO on Saudi Arabia’s stock exchange as the Kingdom emerges as a global financial center in line with the goals outlined in Vision 2030, a top official said.

Speaking at the second edition of the Saudi Capital Forum in Riyadh on Sunday, Mohammed El-Kuwaiz, chairman of the Saudi Capital Market Authority, said 2022 was a record year for the Saudi capital market, with 49 listings, as well as SR40 billion ($10.66 billion). ) raised in equity; the highest number in any year, with the exception of 2019 when Saudi Aramco was on the list.

Today, 23 of those companies are on the runway, waiting for the right time for an IPO, El-Kuwaiz said.

He added: 2022 was a record year in terms of number of IPOs. We had 49 listings, including listings in the main market, listings in Nomu, and listings from other investment products. Last year, the capital markets raised about 40 billion SR in equity, which was actually the highest amount raised in any year apart from the year of Saudi Aramco’s listing.

According to El-Kuwaiz, Saudi Arabia was the world’s fourth largest market by the amount of equity raised, just behind China, India and South Korea.

However, the CMA chairman noted that despite the wave of applications for IPOs, the authority is very vigilant in approving these requests.

Despite the highest number of ads and a higher number of signups, we also see a higher number of rejections. The CMA has begun rejecting files that do not meet disclosure and government standards for the first time, he added.

Commenting on the possibility of duplicate listings, El-Kuwaiz added: We are having several discussions about duplicate listings. We are starting to see a vibrant wave of applicants seriously looking for opportunities. We create frameworks based on this interest.

El-Kuwaiz also outlined the rapid increase in foreign investor participation in the Saudi capital market.

According to the CMA chairman, foreign investors represent less than 15 percent of the free float and were responsible for an inflow of SR 43 billion in 2022, the highest since the opening of the capital market and inclusion in global indices.

We continue to see a rapid increase in the share of foreign investors, both in terms of ownership and trade. In the equity market, the reaction of foreign investors remains quite positive. Our expectation is that positive is never good enough. I think we need to further improve regulation to make the market more accessible, he said.

El-Kuwaiz further pointed out that Saudi Arabia has made all necessary arrangements and regulatory reforms to make the investment process in the Kingdom easier.

Speaking about the ongoing Capital Market Forum, he said the number of people attending the conference is a reflection of the level of capital market activity and the level of IPO activity in the Kingdom.