RIYADH: Saudi Arabia’s capital market institutions reported an annual surge of 27 percent in operating income in the second quarter of 2024 – reaching SR4.1 billion ($1.1 billion).
Data released by the Kingdom’s Capital Market Authority indicated that the standout performer was asset management, contributing the largest revenue share at 31 percent, totaling SR1.28 billion — a 22 percent rise compared to the same period last year.
Investments followed closely, accounting for 30 percent of income at SR1.21 billion, which marked a 15 percent decline from the previous year.
Dealing activities ranked third, generating SR603.67 million, representing a 15 percent share and a 22 percent year-on-year increase.
Meanwhile, investment-banking revenues soared by 66 percent, reaching SR406.18 million and comprising 10 percent of total income.
The combined net profit, reflecting earnings after all expenses, zakat, and taxes, decreased by 3 percent to SR2.05 billion, down from SR2.13 billion in the same quarter last year.
This decline was largely driven by a rise in non-operating expenses, significantly impacting the bottom line.
On the trading front, the Saudi market led with SR900.35 billion, capturing 94 percent of the total traded value by local capital market institutions.
In contrast, US markets accounted for just 6.1 percent, totaling SR58.56 billion. The remaining share was distributed among other markets, including those in the Gulf Cooperation Council and the wider Arab world, Asia, and Europe.
According to the report, these institutions saw a significant boost in their aggregate balance sheet, with total assets climbing 29 percent to nearly SR73.25 billion, up from SR56.83 billion in the same quarter of 2023.
Liabilities surged by 68.73 percent year-on-year, reaching SR27.79 billion. Meanwhile, shareholders’ equity grew by 13 percent compared to the previous year, totaling SR45.42 billion.
According to a KPMG report, the Saudi stock exchange has swiftly evolved from a local market with limited options into the world’s 10th-largest by market capitalization.
This remarkable growth is largely attributed to reforms implemented by Tadawul and the Capital Market Authority, aligning with Vision 2030’s goals of economic diversification.
The report highlighted that increased foreign investment has significantly bolstered these reforms.
The Kingdom’s capital markets have remained resilient despite global economic uncertainties, such as high inflation and geopolitical tensions.
In 2022 alone, they attracted SR50.8 billion through initial public offerings and rights issues. This surge in market activity is fueled by improved liquidity, heightened investor confidence, and the government’s push for privatization and economic expansion, all supported by favorable oil prices.
Saudi Arabia’s CMA launched a strategic plan for 2024-2026 to enhance its debt market and asset management industry, highlighted during the September Debt Markets and Derivatives Forum held in Riyadh.
The plan includes over 40 initiatives focused on increasing market transparency, introducing special-purpose acquisition companies, and facilitating Saudi depositary receipts to attract local and international investors.
Key goals include boosting the stock market’s value to 80.8 percent of gross domestic product by 2025 and expanding the debt market to 24.1 percent of GDP. The strategy also emphasizes regulatory reforms, fintech growth, and improved investor protection to establish the Kingdom as a leading global financial hub in line with Vision 2030.
