The three-day Capital Markets Forum — organized by Saudi Tadawul Group — kicked off yesterday at Riyadh’s KAFD Conference Center. The event, held under the theme “Powering Connections”, aims to showcase the Kingdom’s growing capital market while featuring panel discussions on topics including digital transformation, ESG investments, regional economic integration, and market diversification.

TADAWUL IS GOING DIGITAL-

#1- Tadawul rolls out IPO management platform to boost equity market efficiency: The Saudi Exchange Company launched a new Capital Management System (CMS) designed to streamline IPOs, it said in a statement. The platform will now be fully implemented on the main market after a successful pilot phase on Nomu, enabling direct subscriptions for a wide range of securities.

The new features: Investors can subscribe to IPOs directly from their existing portfolios without opening new accounts. Issuers would also benefit from shorter listing timelines and access to a broader investor base, which the company hopes would help drive stronger demand for new offerings while reducing administrative overhead for financial institutions.

#2- The Securities Depository Center (Edaa) also rolled out a new platform, Edaa Connect, to digitally register all investment funds — starting with public funds — in a bid to broaden investor access and boost participation in the domestic capital market, according to a press release (pdf). The new platform is set to serve as a central hub for subscription and redemption of mutual fund investments to both individual and institutional investors.

Also in the pipeline: Edaa plans to introduce omnibus accounts for the stock market, the group’s CEO Hanan Al Shehri told Al Arabiya Business on the sidelines of the ongoing Capital Markets Forum in Riyadh. The new accounts would allow asset managers to hold multiple client portfolios under a single account, Al Shehri added.

INSIGHTS FROM THE FORUM-

#1- Tadawul ranked ninth globally in 2024 for primary market activity and seventh for returns from listings, Capital Market Authority (CMA) board of directors member Abdulaziz bin Hassan said during the ongoing Capital Markets Forum in Riyadh, according to Al Arabiya. The year also saw a 37% y-o-y increase in turnover on the Saudi market and a 24% y-o-y rise in the profitability of listed companies — excluding Aramco.

The outlook for 2025: Some 55 listing requests have already been submitted this year, bin Hassan added, with 15 already approved as the bourse is expected to have a “record year” for listings, Tadawul CEO Mohammed Al Rumaih tells Reuters. Companies in the aviation sector are expected to go public soon, bin Hassan said, without providing further information. Another 100 listing applications are currently in the pipeline to be submitted to the CMA.

ALSO- Fed rate cuts to give a boost to regional stock markets: EFG Hermes Co-CEO Mohamed Ebeid expects the US Federal Reserve to cut interest rates by 100 bps in 2025, which he thinks would bode well for regional stock markets. Lower interest rates will drive investments in mortgage, banking, and consumer sectors, he told Al Arabiya.

Momentum to continue through this year: Saudi Arabia — which led EFG Hermes’ IPO activity in 2024 with six offerings worth USD 20 bn — is expected to dominate listings again in 2025, with a focus on consumer, education, and healthcare sectors, Ebeid said.

#2- The Kingdom is looking to convert some of its bank debt into tradable securities, in a move aimed at boosting liquidity and trading activity in the domestic capital markets, Argaam reports citing a speech by Investment Minister Khalid Al Falih. The initiative falls under broader efforts to diversify local financing channels and drive investor participation in the Saudi debt market, which currently represents just 4% of GDP — well below the G20 average of 40%, Al Falih added.

What this could mean for the markets: The plan to convert bank debt into tradable securities could inject new life into the local capital markets, by expanding the range of investment products thereby attracting more institutional and retail investors, and driving up engagement.

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