RIYADH: Saudi Exchange is on track to broaden its market offerings, attract foreign listings, and strengthen the debt and derivatives markets, according to its CEO.   

Speaking in an interview with Arab News on the sidelines of the third edition of the Saudi Capital Market Forum, Mohammed Al-Rumaih explained that this reflects signs of strength. 

This also falls in line with the Kingdom’s attempts to propel the country’s stock exchange and instigate a pickup in trading activity.   

“From the Saudi Exchange angle, we are developing the current markets. We have the equity, the debt, and derivatives,” Al-Rumaih said.   

“On the equity side, we’re trying to provide the issuers with more ways to list their companies; for example, direct listing on the main market,” the CEO added.   

In addition to this, he emphasized that Saudi Exchange collaborates with regulator market participants to enhance operations, drawing from experiences such as those in the Nomu market, with aspirations to produce similar achievements in the main market.

He stressed that the entity is also working on the foreign listing to bring companies from abroad selectively. 

“Also, we are having strategic focus on the debt market, and it will serve us in many angles,” Al-Rumaih noted.   

The CEO highlighted that it would aid the economy by providing the private sector with abundant liquidity to grow.   

Additionally, debt is one way to raise capital and increase the company’s value as well, he further clarified.   

“So, if you are a listed company, it will be easier for you to tap into the debt markets,” Al-Rumaih emphasized. 

“Another thing that we are focusing on is the derivatives market as well. We have started two years ago and recently we have launched the single stock option,” Al-Rumaih underlined.   

He continued: “We are working on having market makers refining based on the feedback that we’re getting from the investors and our members.”  

With regard to the Kingdom’s initial public offering pipeline, the CEO indicated that it is projected to bring about positive results. 

“We are having listings every week. There are big applicants. We have a healthy IPO pipeline and we are nurturing it to make it even bigger,” he reassured. 

Al-Rumaih also underscored the diversity among applicants, spanning across various sectors within the market, explaining how this diversity caters to the needs of different types of investors.

He elaborated that this was not the case a few years back regarding how the market responds to its various needs and wants.

“For example, a few years ago, we could not have any company in the information technology; today, we have a large number of IT companies already listed because there are a lot of automation and digitization now that the kingdom has gone through,” the CEO expanded. 

He also emphasized that they consistently oversubscribed regardless of the offering size, indicating a healthy capital market.

“So, we don’t look to what’s the size of certain IPO. We are certain that with the investor base we have, with the liquidity that is growing every day, we can accommodate for large IPOs, same as we cater for these small IPOs,” he underscored. 

Moreover, Al-Rumaih disclosed that as he was speaking, the value of investments exceeded $100 billion, mainly from past passive investors. 

“We have reached a size that no international investors can ignore,” he said.

Discussing the split of the IPOs, the CEO said: “There is no specific, I would say, structure. Some of the IPOs 20 percent allocated to foreign investors, some of them lower than that, about 10 percent.”

He highlighted that it primarily depends on the issuer, the financial advisor, and the IPO manager. 

The two-day event, organized by Saudi Tadawul Group and held under the theme “Powering Growth,” aims to serve as a nexus for transformative dialogue and innovation, fostering the convergence of emerging markets with established financial frameworks.    

Emphasizing the pivotal role of such events, Mahmoud Khairy, an economist and policy adviser, told Arab News earlier this week: “The forum facilitates essential dialogue among key stakeholders, fostering collaboration and innovation within the financial sector.”    

Khairy also said that the event aligns with Vision 2030’s goals by promoting transparency and good governance and attracting domestic and international investments.