There is ‘real excitement’ among global investors about Saudi capital market, Riyadh forum is told

‘There is real excitement in terms of what is now happening in the Middle East, but specifically in the Saudi market,’ Rothschild & Co executive says

Growing the kingdom’s debt capital market and asset-management industry, as well as rolling out new tools to support businesses in the capital market, will be the Saudi financial regulator’s top priorities in the future

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The Saudi market has grown in a very robust manner because it has a very strong domestic investor base, says a Goldman Sachs executive. Photo: Shutterstock

Published: 8:30pm, 20 Feb 2024Updated: 3:07pm, 21 Feb 2024

Saudi Arabia’s capital market is very attractive in the eyes of global investors, and the kingdom’s authorities are pushing for more regulation to enhance the market’s accessibility and stability, with the aim of boosting confidence and attracting further international capital inflows, said panellists at the Saudi Capital Market Forum in Riyadh on Tuesday.

“We’re trying to adopt the concept of enabling regulations instead of deregulations, and this is one of the things that you might find different in the Saudi development endeavour,” said Abdullah Binghannam, the deputy of financing and investment at Saudi financial regulator Capital Market Authority (CMA).

“Whereas deregulation could be a choice in different parts of the world, and while we think it’s very important, we believe that international investors are into confidence before everything else, [and] confidence is viewed as the catalyst for international inflows,” he said.

The CMA’s efforts to open up and boost confidence in Saudi Arabia’s capital markets have led to, among other things, more than 70 billion riyals (US$18.7 billion) in initial public offering (IPO) subscriptions from international investors, which exceeded the offerings themselves, Binghannam said.

“Of course, [international investors’] allocation was less than that number because of the higher demand from local investors, but this is a very important signal for how the opening up is serving the raising of capital,” he added.

Binghannam also said that growing the kingdom’s debt capital market and asset-management industry, as well as rolling out new tools to support businesses in the capital market, will be the CMA’s top priorities in the future.