Saudi Arabia Sets Sights on Boosting Stock Exchange Appeal to Foreign Investors
In a bold move to attract more foreign investors, Saudi Arabia aims to increase the ownership of free float shares to 17 percent by 2024, as revealed in a new report.
The 2023 Financial Sector Development Program outlines the plan by the Saudi Capital Market Authority to elevate assets under management to 29.4 percent of the gross domestic product by 2024, with the goal of creating a more favorable investment environment.
The report, published annually, highlights the Kingdom’s progress in competitiveness indicators related to the capital market, as noted by Mohammed Al-Jadaan, the minister of finance and chairman of the FSDP.
Al-Jadaan stressed the significance of innovation and investments in talent and technology for the development of the financial sector.
“We have prioritized innovation and investment in talent and technology to build a dynamic financial environment that fosters the growth and success of companies, especially startups,” stated the minister.
The CMA plans to expedite listings by welcoming 24 new companies in 2024 and aims to have micro and small enterprises represent 45 percent of total listings.
Additionally, efforts will be made to deepen the sukuk and debt instruments market to increase the debt-to-GDP ratio to 22.1 percent by the end of 2024, providing diverse financing options for companies to stimulate economic growth.
“The capital market ecosystem is dedicated to contributing to the financial sector’s development and the realization of the Saudi Vision 2030,” said Mohammed El-Kuwaiz, chairman of the CMA.
El-Kuwaiz highlighted the increase in foreign investments in the capital market, reaching SR401 billion ($106.9 billion), due to rules for foreign investment in securities and streamlined regulatory procedures.
The Saudi Central Bank reiterated its commitment to international standards and best practices to strengthen the financial sector, with initiatives like digital solutions for supervising the financial sector and supporting local and international FinTechs.
The Financial Academy unveiled its strategy for 2024-2026, focusing on enhancing human capabilities in the financial sector through training programs and professional certifications to meet industry needs.
The 2023 FSDP report showcased progress in sectors like fintech and digital banking, with Saudi Arabia surpassing targets for fintech companies and launching two digital banks.
The Kingdom excelled in various indices, attracting foreign companies to relocate headquarters, deepening the capital market.
Credit rating agencies Moody’s, Fitch, and S&P Global Ratings revised Saudi Arabia’s outlook to “Positive” and affirmed its credit ratings, citing fiscal policy development and economic reforms.
Saudi Arabia led venture investments in the Middle East & North Africa, securing 52 percent of total investments in 2023 and allocated SR10 billion to support small and medium enterprises across economic activities and regions in the first half of the year.