$10.66 billion.. Saudi capital market recorded public offerings in 2022

The Saudi financial market advanced seven places to third place in the competitiveness indexes among the G20 countries this year.

 The Swiss-based International Institute for Management Development revealed in its latest report.

According to the IMD Global Competitiveness Yearbook 2023, the Kingdom's performance embodies the continued efforts of the Capital Market Authority to apply global best practices.

Corporate board index

The Kingdom ranked first in the corporate board index among the G20 countries. It ranked second in the capital markets, shareholders' rights, and investment capital indicators.

Stock market index

The yearbook also revealed that Saudi Arabia ranked third in the world in the stock market capitalization index. It surpassed developed countries such as Japan, India, Germany, the United Kingdom, China and the United States.

The Kingdom also topped all Arab countries participating in the report in nine out of 12 indicators.

Capital market

Its achievement comes as a result of the Capital Markets Authority’s continuous efforts to improve and develop the capital market sector by applying relevant international best practices.

The Authority played an effective role in approving regulations for stock exchanges, depository centers, and Sharia governance in other capital markets institutions.

Its role in developing corporate law for listed joint stock companies has improved the business environment, making it conducive to additional investments.

$10.66 billion

The Saudi capital market recorded a flurry of initial public offerings in 2022, with 49 listings and 40 billion Saudi riyals ($10.66 billion) in capital, the highest number in any single year, except for 2019, when the Saudi Arabian Oil Company was listed. 

Developed capital market

"The Kingdom of Saudi Arabia aims to establish an advanced capital market that is open to the world and capable of attracting local and international capital, playing an effective and pivotal role in meeting the requirements of financing the economy," the authority said in a statement.

Share Index

 According to a report by S&P Global Ratings, the market capitalization of the Tadawul All Share Index surged to over $2.9 trillion in June, up from $420 million in 2015.

The firm suggested that the increase indicates solid economic fundamentals and positive investor sentiment in Saudi Arabia.

Tadawul and the Capital Market Authority have launched several initiatives to expand the capital market in recent years as the Kingdom seeks to diversify its economy in line with the Vision 2030 initiative. 

These included streamlining the listing process and making significant investments in market infrastructure. 

Foreign investors

These institutions approved regulations to ease foreign investors’ access to Saudi capital markets and implemented policies to improve corporate governance standards and transparency.  

“Even if we were to exclude the contribution from the market capitalization of Saudi Aramco, market capitalization has almost doubled since then (2015),” said Dhruv Roy, credit analyst at S&P Global, in a statement. 

Saudi stocks gained international exposure in 2019 after being added to the MSCI Emerging Markets Index, FTSE Russell, S&P Dow Jones, and other indices.  

Biggest stock market

By market capitalization and trading volume, Tadawul is the biggest stock market in the Middle East and North Africa region.   

The initial public offering of Saudi Arabian Oil Co. in 2019 was a significant event, and several other Saudi entities have entered the equity market since then.   

S&P Global Credit analyst Timucin Engin stated: “Given the significant economic transformation expectations and funding needs associated with Vision 2030, we expect Saudi debt market evolution to potentially outpace that seen in some other developed markets.”  

He added: “Government-related entities, major financial institutions, and key blue-chip corporates will initially lead the way.”   

The report, titled “Saudi Arabia’s Debt Market: Ready For Takeoff,” suggested a robust and high-quality local debt market is essential for the economy to grow and change and support the funding requirements stemming from large Vision 2030 projects.