Capital Markets
From The Report: Saudi Arabia 2013
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It has been a good couple of years for the Saudi Stock Exchange (Tadawul), which posted considerable growth in 2011 and 2012. Market capitalisation was up more than 10% over 2011 due to a spate of initial public offerings (IPOs) in late 2011 and 2012. However, while the Tadawul is the largest and most liquid exchange in the region, it lacks large institutional investors; around 90% of trading activity in recent years has been driven by individual retail investors. Additionally, the exchange-based bond market remains small and largely operates on a buy-and-hold basis. Yet despite these issues, the Tadawul is widely expected to continue to grow in the coming years: the government’s ongoing large-scale infrastructure and housing investment programme will likely result in considerable demand for local financing for some time to come.

Articles from this Chapter

Overview

Trading up: The Kingdom’s capital markets lead the region
OBG
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It has been a good couple of years for the Saudi Stock Exchange (Tadawul), which posted considerable growth in 2011 and 2012. Throughout 2012, nearly all of the market’s major indicators improved substantially over the previous year. Market capitalisation was up more than 10% over 2011, for example, due to a spate of initial public offerings (IPOs) in late 2011 and 2012. Additionally, the Tadawul All Share Index (TASI) rose by nearly 6% and the value of shares traded was up by more than 75%. According…

Analysis

Stocking up: A slew of new listings bodes well for the exchange
OBG
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Throughout 2012 activity in Saudi Arabia’s initial public offering (IPO) market picked up considerably compared to the previous year. By the end of December, the Saudi Stock Exchange (Tadawul) had seen seven new listings worth a total of SR5.33bn ($1.42bn), up from five listings worth a total of SR1.73bn ($461.22m) in 2011. The uptick in new listings is widely considered to be indicative of a reversal in wider market sentiment, which reflects the Kingdom’s rapidly strengthening economic position…

Analysis

In from the cold: Foreign investment could potentially transform the market
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As of late 2012 Saudi Arabia’s Capital Markets Authority (CMA) was on the brink of implementing new legislation that would allow foreign investors to own stocks on the Saudi Stock Exchange (Tadawul). The Qualified Foreign Investors’ Law (QFIL), which has been in development since 2008, is expected to be officially implemented in early 2013. The new law is considered to be a primary component of the government’s long-term economic diversification strategy. This plan aims to develop the Kingdom’s…