Remarkable Growth of the Saudi Stock Exchange (Tadawul)

The Saudi Stock Exchange (Tadawul) has achieved extraordinary growth, transforming from a local market with limited capital products into a global powerhouse. It is now the world’s tenth-largest exchange by market capitalisation, having reached a remarkable SAR11 trillion in June 2023, reflecting its increasing significance and appeal in the international financial arena.

This impressive progress is a result of comprehensive reforms by Tadawul and the Capital Market Authority (CMA), in line with the Kingdom's Vision 2030 to diversify the economy. These efforts have significantly boosted international recognition of the exchange and expanded the investor base for IPO candidates. Notably, foreign ownership in the capital market surged from SAR198 billion in 2019 to SAR376 billion in June 2023.

Despite global economic uncertainty driven by high inflation, rising interest rates, supply chain disruptions, and geopolitical tensions, Saudi Arabia's capital markets have shown remarkable resilience. In 2022, Tadawul facilitated substantial funding of SAR50.8 billion through IPOs and rights issues, reflecting increased liquidity, investor confidence, and government initiatives to privatise assets from the Public Investment Fund (PIF) and state entities. The broader economic growth in the Kingdom, supported by favourable oil prices, has further bolstered the expansion of capital markets.

While the rapid IPO growth of 2022 slowed in 2023, the future pipeline remains robust with over 25 companies preparing for IPO submissions in the latter half of 2023 and beyond. Among the notable upcoming listings is NEOM, expected to go public in 2024. Additionally, Ades International Holding Company, an oil and gas drilling firm backed by the PIF, is projected to be the largest IPO in Saudi Arabia in 2023, aiming to raise SAR3.75 billion. The year 2024 promises to be exciting as Tadawul is set to introduce more IPOs, potentially transforming the Saudi stock exchange's performance.

Stay tuned for more updates as Tadawul actively continues to shape the future of Saudi Arabia's capital markets while driving the Kingdom's significant economic transformation and development initiatives.