RIYADH: Saudi Arabia’s capital market saw impressive growth in 2024, with record-breaking initial public offerings, significant reforms, and an expanding global presence.
The big question now is whether 2025 can take this momentum even further.
The Kingdom led the Gulf Cooperation Council IPO market last year, with 19 listings in the first half, surpassing the 17 offerings in 2023. These achievements have firmly positioned Saudi Arabia as an emerging financial powerhouse.
“IPOs have been a key driver of growth in Saudi Arabia’s capital market in 2024, reinforcing the Kingdom’s position as a regional leader,” Imad Matar, PwC Middle East deals advisory leader, told Arab News.
Imad Matar, PwC Middle East deals advisory leader. Supplied
Listings such as Nice One Beauty Digital Marketing Co., Almoosa Health Co., and Tamkeen Human Resources highlighted the diversity of sectors supporting Vision 2030.
On the significance of these IPOs, Matar stated: “These listings show the growing ability of Saudi Arabia to attract investments across diverse and high-growth sectors.”
Ali Anwar, managing director and Middle East practice leader of the global transaction advisory group at Alvarez and Marsal, shared insights with Arab News on the government’s proactive efforts to foster a dynamic IPO market.
Ali Anwar, managing director and Middle East practice leader of the global transaction advisory group at Alvarez and Marsal. Supplied
“IPOs in 2024 contributed to the liquidity and depth of the Saudi stock market, bringing fresh capital into the market. This not only increased the size of the market but also provided investors with more investment choices, enhancing the overall appeal of Saudi Arabia’s capital markets,” Anwar told Arab News.
Sustainability at the forefront
Environmental, social, and governance investments played a pivotal role in Saudi Arabia’s market evolution in 2024, closely aligning with the Kingdom’s Vision 2030 agenda.
This transformation was marked by a rise in green bonds and ESG-compliant IPOs, positioning Saudi Arabia in line with global sustainability standards.
“The government’s focus on green energy, sustainable infrastructure, and social responsibility has led to an increase in green bonds, ESG-compliant IPOs, and investments in sectors such as renewable energy, technology, and healthcare,” Matar said.
He added: “These initiatives are driving growth in emerging sectors while furthering Saudi Arabia’s economic diversification efforts.”
Easier business, greater confidence
Regulatory reforms like the New Companies Law and Civil Transactions Law brought significant changes in 2024, streamlining business processes and fostering a more transparent investment environment.
However, what truly proved to be a game-changer was the launch of new financial products, such as options and futures, on Tadawul. These innovative tools are unlocking a wealth of investment opportunities for both local and international investors.
Matar highlighted the introduction of financial instruments like options and futures on Tadawul as a key milestone.
“The introduction of options, both call and put options, has been a significant step. These contracts give investors the right, but not the obligation, to buy or sell assets at a set price within a specified time frame, which adds an extra layer of flexibility,” Matar said.
He further noted: “It’s not just about stocks anymore; options and futures allow investors to hedge, manage risk, and even profit from market movements in ways that were previously unavailable.”
Regulatory reform was not the only factor in improving business processes and creating a more transparent investment environment. When asked, Anwar also emphasized the role of the Capital Market Authority.
“The CMA has continued its efforts to strengthen corporate governance frameworks and transparency, making the market more open and helping investors make informed decisions. These shifts have boosted investor confidence, making Saudi Arabia more attractive to both regional and international capital,” Anwar explained.
He added: “The CMA has made it easier and quicker for companies to list by introducing more flexible listing requirements for SMEs. The regulatory environment for foreign investors has undergone changes to make Saudi Arabia’s capital market more accessible, making it easier for international investors to buy into the Saudi market.”
Saudi Arabia has also simplified the procedures for companies to introduce various financial products, including exchange-traded funds, sukuk, and structured products, into the market.
By making this process more efficient, the Kingdom has expanded the range of investment opportunities available.
“This has opened up more investment options for both domestic and foreign investors who are looking for a wider variety of financial instruments,” Anwar said.
Foreign investors
Foreign investor participation was crucial in boosting Saudi Arabia’s market liquidity and global integration in 2024.
The Kingdom attracted substantial foreign capital through IPOs, sukuk issuances, and privatization efforts across key sectors such as sports, infrastructure, and tourism.
“In Q2 2024, Saudi Arabia led the GCC IPO market, raising $1.6 billion, accounting for 61 percent of the region’s total IPO activity. Notable listings, such as Dr. Soliman Abdel Kader Fakeeh Hospital, along with average IPO gains of 43 percent, highlight growing investor confidence,” Matar said.
He also highlighted the impressive growth in sukuk issuances, stating: “The Kingdom saw a significant increase in sukuk issuances, raising over $10 billion in Q2 2024, more than quadrupling the previous year. Foreign direct investments also grew, with Q1 2024 inflows rising by 5.6 percent to SR9.5 billion.”
He highlighted that ongoing reforms and privatization efforts in sectors such as sports, infrastructure, and tourism are expected to continue driving this growth. These trends underscore Saudi Arabia’s growing appeal as an investment destination, fueled by ongoing regulatory reforms and the economic diversification goals of Vision 2030.
When asked about the role IPOs played in shaping the market’s performance and attracting foreign investments, Anwar explained that in 2024, the government advanced its strategy of listing state-owned entities or reducing its stake in publicly traded companies.
This shift helped reduce the state’s direct control over certain sectors, fostering greater private-sector participation and competition.
Essentially, the successful IPOs of high-profile companies not only brought in fresh investments but also reflected strong local and international confidence in the country’s economic trajectory.
“Successful IPOs in 2024 demonstrated a high level of investor confidence, both locally and internationally, in Saudi Arabia’s economic future,” Anwar said.
He continued: “IPOs of well-known companies with strong growth prospects not only helped boost the stock market’s performance but also reassured investors that the regulatory environment was becoming more open and investor-friendly.”
Anwar added: “Strong post-IPO performance of many companies signaled the robustness of the market, leading to further interest in upcoming listings and a more vibrant secondary market.”
Outlook 2025
As 2025 begins, Saudi Arabia’s capital market is set to benefit from ongoing diversification, strong IPO activity, and advancements in digital finance.
“In 2025, Saudi Arabia’s capital market is expected to continue its growth trajectory, driven by several key trends and economic opportunities,” Matar said.
He added: “The continued privatization of state-owned assets and strong IPO activity will provide more investment opportunities and strengthen market liquidity.”
By embracing digital transformation through advancements in artificial intelligence, blockchain, and fintech, the Kingdom is modernizing its financial systems to improve efficiency, reduce costs, and streamline processes.
These technological innovations are not only making financial transactions faster and more reliable but also attracting global investors who value transparency and innovation.
At the same time, Saudi Arabia’s commitment to green finance, including the issuance of green bonds and investments in sustainable projects, underscores its dedication to fostering environmentally conscious and socially responsible growth.
“These trends are likely to shape the capital market by enhancing market depth, global integration, and investor confidence,” Matar said.
He added: “By attracting international companies and investors, Saudi Arabia is not only diversifying its economy but also strengthening its financial ties with global markets.”
Anwar also shared a forward-looking perspective: “The Saudi government is likely to continue pushing for the privatization of state-owned assets, as well as encouraging more private sector IPOs.”
He further noted: “Technology, consumer, healthcare, and infrastructure-related entities are likely to dominate new listings in 2025. Foreign investments are likely to continue flowing into Saudi Arabia’s capital markets, supported by the ongoing reforms and market inclusion in global indices.”
Saudi Arabia is also making its financial markets more accessible to international investors by relaxing foreign ownership rules, expanding market entry points, and creating financial products designed to meet global investor needs.
These efforts are expected to attract more foreign investment and participation in the market.
In addition, the government is focusing on supporting small and medium-sized enterprises by implementing policies that simplify and expedite the process for them to raise capital through public listings.
In 2024, Saudi Arabia’s capital market demonstrated resilience, ambition, and a forward-looking vision. With a roadmap shaped by innovation and diversification, 2025 promises to be another defining chapter in the Kingdom’s journey toward global prominence.
