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Saudi family businesses eyeing IPOs

Riyadh, May 8, 2014

Saudi Arabia’s capital markets are set for sustained growth, said a top financial official.

“We see strong demand coming from within the Saudi Arabian economy,” remarked Adel Saleh Al-Ghamdi, the CEO of the Saudi Stock Exchange (Tadawul).

“There are currently 35 family-owned businesses in Saudi Arabia exploring their options for IPO with financial advisors at this time,” he added.

The Tadawul is now the ninth largest emerging market stock exchange out of a basket of 24 exchanges in terms of market capitalization, and has the sixth highest liquidity.

Confidence is one of the key elements for sustained economic growth, stated Al-Ghamdi.

He was outlining the dynamic factors supporting the growth of the Arab world’s largest exchange at the 9th Euromoney Saudi Arabia Conference this week.

Senior executives from leading banks and enterprises, including Saudi Aramco, Manafea Holding Company, Amundi Asset Management, Saudi Kuwait Finance House Bahrain and HSBC Saudi Arabia also took part in a major discussion on the direction and evolution of the Kingdom’s capital markets.

The leading speakers from both within the Kingdom and from international banks and financing groups all expressed strong confidence during this week’s event.

In the session about 'Potential Risks and Future Financial Crises', Robert Parker, the senior adviser at Credit Suisse discussed the significant improvement of bank risk globally over the last three years and warned about real estate bubbles.

“Real estate bubbles in Singapore, London, Switzerland and other countries are considered as big financial risks,” he stated.

"The other financial risks include youth unemployment, large current account deficits in emerging markets, China’s economic slowdown and shadow banking," he added.  

In addition, Parker had identified three major geo-political risks that might lead to future financial crises, including the Russia-Ukraine conflict, the negotiations with Iran and the China-Korea-Japan triangle.

In a recent report, Al Rajhi Capital noted that Tadawul is “ready for foreign investors,” thanks to a strong economy, robust banking system, institutions to manage foreign investment in equity markets, and a track record for managing banking liquidity.

The 9th Euromoney Saudi Arabia Conference is the longest-running, largest and most influential financial conference in the Kingdom. It has attracted around 1,300 pre-registrations from all over the region and the world.-TradeArabia News Service




Tags: IPO | economy | Saudi | Family business |

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