DUBAI: Saudi Arabia’s Tadawul has introduced an equity index cap of 15 percent which is set to address concerns over the weighting oil giant Saudi Aramco will have when it lists on the exchange.
State-owned oil firm Aramco is expected to list 1.5 percent of its shares this month in a deal which could raise more than $25 billion and top the record initial public offering (IPO) of Chinese retailer Alibaba on the New York Stock Exchange in 2014.
Samba Capital, NCB Capital and HSBC Saudi Arabia, the joint financial advisors and joint global coordinators for Saudi Aramco’s initial offering, said on Monday that institutional bids during the first 15 days of the bookbuilding period amounted to SR144.16 billion, with 4.551 billion shares subscribed for.
The institutional bookbuilding period continues until December 4, 2019.
The Aramco IPO is seen as a test for the Saudi exchange, where the largest listing so far has been worth $6 billion.
“Any constituent whose index weight reaches or exceeds the threshold will be capped in accordance with the set limit,” Tadawul said in a statement on Monday.
The move is part of a broader update of Tadawul’s index methodology, including a revision of the free float shares calculation methodology for shares owned by government entities.
The new measures will “ensure more balanced indices, which will accurately represent the movement of the market, enhance disclosures and transparency and minimize securities’ dominance,” Tadawul’s CEO Khalid Al-Hussan said in a statement.
Tadawul also said it has applied a new “Fast Entry” rule allowing shares of IPOs to be included in the all-share equity index at the close of the fifth trading day.
The updates will be effective by the end of the year.
Saudi Tadawul to limit Aramco index weighting with cap
Saudi Tadawul to limit Aramco index weighting with cap
- State-owned oil firm Aramco is expected to list 1.5 percent of its shares this month
- Institutional bids during the first 15 days of the bookbuilding period amounted to SR144.16 billion
Saudi environmental compliance sector unveils opportunities worth over $8bn
RIYADH: The Invest Saudi platform offers specialized opportunities with expected revenues exceeding SR30 billion ($8 billion), according to the National Center for Environmental Compliance.
In a statement, the center invited local and international investors to seize the listed opportunities and benefit from various incentives, ranging from administrative support to direct financing.
Saad Al-Zubaidi, executive director of business development, explained that this market size reflects the specialized nature of the environmental compliance sector as a supporting sector for all economic activities.
Sectors such as industry, energy, mining, construction, services, and infrastructure rely on it to comply with environmental regulations and enhance operational efficiency.
Incentive and financing packages
The center, in integration with various government entities, is working on developing comprehensive incentive packages for investors in the field.
These packages include direct financing tools, soft loans, and guarantee programs, in addition to regulatory and procedural enablers aimed at accelerating the investment cycle and reducing operational risks.
The payback period for investments starts from 4 years and does not exceed 7 years at most, according to the center.
The current market size stands at SR14 billion, according to Al-Zubaidi, who expects it to double within 5 years.
The market diversifies across fields including the manufacturing of pollution control systems, the manufacturing of air and water quality monitoring devices, soil and groundwater rehabilitation, and building specialized technical capacities in the environmental field.
Trend toward localizing environmental technologies
Al-Zubaidi confirmed that the announced opportunities have had their preliminary studies completed and are available for investors to review their details and to complete technical and financial feasibility studies according to various business models.
The focus is not limited to maximizing economic return but extends to localizing environmental technologies, transferring knowledge, and building local value chains capable of meeting the growing demand across various sectors.
