Saudi CMA to boost market growth with SPACs, enhanced direct listings

Fahad bin Hamdan, assistant deputy for financing and investment at the CMA, speaks at a panel. AN photo
Fahad bin Hamdan, assistant deputy for financing and investment at the CMA, speaks at a panel. AN photo
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Updated 19 February 2025
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Saudi CMA to boost market growth with SPACs, enhanced direct listings

Saudi CMA to boost market growth with SPACs, enhanced direct listings

RIYADH: Saudi Arabia’s Capital Market Authority is working on the introduction of special-purpose acquisition companies in the capital market to streamline the listing process, according to a senior CMA executive.

The authority is also aiming to improve the framework for direct listings, which may include offerings on the main market, and plans to expand the investor base in the parallel market to boost supply, according to Fahad bin Hamdan, assistant deputy for financing and investment at the CMA.

In his remarks at a conference organized as part of the Capital Markets Forum in Riyadh, he emphasized that SPACs would offer companies an alternative path to going public, simplifying the traditional listing process and encouraging more market participation.

“One of the key initiatives the CMA is focusing on is the introduction of SPACs in the capital market, which will simplify the stock listing process. Additionally, we are enhancing the direct listing framework, potentially including direct listings in the main market,” said Hamdan.

He continued: “We also aim to expand the investor base in Nomu to increase supply. In collaboration with  Zakat, Tax, and Customs Authority, we are working to eliminate the withholding tax on all listed securities, a move that will help attract more foreign investment into the market.”

Streamlining IPO process

Hamdan also mentioned that the CMA may refine its initial public offering process to support Tadawul in making issuances and listings more accessible and appealing across various industries.

This initiative has already led to a 70 percent increase in listed stocks over the past four years, bringing the total to nearly 350 across both the main market and Nomu.

“If we look back four years, we had only five securities or stocks. Today, we have nearly 106 stocks, which reflects how much the market has grown and become more diverse, attracting investors from various sectors,” Hamdan explained.

He highlighted ongoing efforts in the debt market, noting that it has become a significant financing channel for both the public and private sectors.

The CMA has collaborated with key stakeholders, including the Saudi Central Bank, the National Debt Management Center, and Tadawul, to implement initiatives aimed at deepening the market.

Among the key actions taken, the CMA has simplified the offering documents for public debt issuances, allowed direct listing of privately placed debt instruments, and opened the debt market to international depository centers.

Foreign investor engagement has also broadened, attracting a diverse range of participants. To further encourage secondary market activity, the CMA eliminated commission fees on bond transactions, lowering costs and attracting more investors and issuers.

Debt issuances

In addition, the authority is working with ZATCA to introduce sukuk structures with zero tax burdens, removing a significant obstacle for local investors in a low-interest environment.

These reforms have had a notable impact, with the number of debt issuances doubling over the past three years, rising from 30 to 60.

According to Hamdan, the investor base in the debt market has expanded from 500 to over 50,000 participants. The number of transactions in the sukuk and debt market also surged by 893 percent from 2021 to 2023, reflecting the broader engagement from both issuers and investors.

“These amendments also helped reduce the concentration of banks’ ownership of debt instruments. Previously, banks held around 60 percent of total debt,” the official said.

He added: “Now, that figure has dropped to below 45 percent as investment companies, mutual funds, and retail investors have increased their participation.”

The CMA remains dedicated to further deepening the market in collaboration with its partners. In recent years, it has worked with Tadawul to introduce a market-making framework, initially applied to select stocks, aimed at enhancing liquidity and narrowing bid-ask spreads.

This framework is continually evolving to cover a broader range of asset classes, ultimately improving overall market efficiency.

Exchange-traded funds

The Saudi Exchange-Traded Funds market has also experienced substantial growth. Since its launch in 2010 with three ETFs focused on local equities, the sector has expanded to include sukuk ETFs for fixed-income exposure and gold ETFs.

In 2022, there were eight ETFs with a total of SR1.5 billion in assets under management. By 2023, this number had increased to 11 ETFs, with AUM rising to SR6.5 billion.

“Yet, we believe the ETF sector still has room for development and can play a bigger role in market transformation,” Hamdan said.

He continued: “This year, the CMA will conduct a full analysis of the ETF ecosystem to explore new strategies, such as active ETFs, and improve the efficiency of basket creation and liquidity enhancement mechanisms.”

The CMA is also focused on enhancing data dissemination and introducing measures such as short selling and securities lending for ETFs, which will make the market more attractive to both local and international investors.

Hamdan highlighted the growing interest from foreign investors, noting that several ETFs listed in other markets are now investing in Saudi equities.

Foreign investment

The CMA has made significant strides in opening the Kingdom’s market to foreign investors, a process that began two decades ago with the introduction of direct access for foreign residents. In 2015, the Qualified Foreign Investor regime was launched, marking a key milestone in the liberalization of Saudi markets. Since then, ongoing regulatory changes have further eased foreign access and reduced restrictions.

“These efforts have led to a fivefold increase in the number of QFIs over the past four years. By the end of 2023, QFI ownership in the Saudi market had surged to SR422 billion, a remarkable 2,000 percent increase over the past four years,” Hamdan said.

With these continued regulatory advancements, Saudi Arabia’s capital market is set for further growth, diversification, and deeper global integration, all in line with the Kingdom’s Vision 2030 objectives.


Saudi Arabia raises $990m through April sukuk issuance

Saudi Arabia raises $990m through April sukuk issuance
Updated 7 sec ago
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Saudi Arabia raises $990m through April sukuk issuance

Saudi Arabia raises $990m through April sukuk issuance

RIYADH: Saudi Arabia’s National Debt Management Center raised SR3.71 billion ($990 million) through its riyal-denominated sukuk issuance for April, reflecting a 40.5 percent increase compared to the previous month, according to an official statement.

The amount marks a significant rise from March, when the Kingdom secured SR2.64 billion through sukuk. In previous months, Saudi Arabia issued SR3.07 billion in February and SR3.72 billion in January, continuing a trend of strong activity in the domestic debt market.

Sukuk are Shariah-compliant financial instruments similar to bonds, offering investors partial ownership in an issuer’s assets. They are structured to adhere to Islamic finance principles, which prohibit interest payments.

According to the NDMC, the April issuance was divided into four tranches. The first tranche was valued at SR1.31 billion and is set to mature in 2029. The second amounted to SR80 million, maturing in 2032, while the third tranche, worth SR765 million, will expire in 2036. The largest portion, valued at SR1.55 billion, is due in 2039.

The Kingdom’s debt market has seen rapid growth in recent years, drawing increased interest from investors seeking fixed-income instruments amid a global environment of rising interest rates.

Earlier this month, a report by Kuwait Financial Center, known as Markaz, revealed that Saudi Arabia led the Gulf Cooperation Council region in primary debt issuances in the first quarter of the year. The Kingdom raised $31.01 billion from 41 offerings, accounting for 60.2 percent of all issuances across the GCC during that period.

In a separate development, global credit rating agency S&P Global said Saudi Arabia’s expanding non-oil sector and healthy sukuk issuance levels could contribute significantly to the growth of the global Islamic finance industry.

The agency projected global sukuk issuance could reach between $190 billion and $200 billion in 2025, with foreign currency-denominated issuances contributing up to $80 billion, provided market volatility remains contained.

A report published in December by Kamco Invest further projected that Saudi Arabia would account for the largest share of bond maturities in the GCC from 2025 to 2029, with a total of $168 billion expected to mature during that period.


Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals

Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals
Updated 13 min 19 sec ago
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Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals

Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals

RIYADH: More than 40 Indian companies have established headquarters in Saudi Arabia, with additional facilities in the defense sector expected in the near future, according to a top official.   

Abdulaziz Al-Qahtani, chairman of the Saudi-Indian Business Council, made the comments as Indian Prime Minister Narendra Modi arrived in Jeddah on Tuesday for a two-day visit. 

He is expected to meet with Crown Prince and Prime Minister Mohammed bin Salman during the trip.  

Al-Qahtani said the visit aligns with Saudi Arabia’s broader push to localize defense spending, boost technology transfer, and expand domestic investment across sectors that contribute to national gross domestic product.  

In an interview with Al-Eqtisadiah, Al-Qahtani said Saudi investments in India are valued at around $10 billion, including stakes by the Public Investment Fund in major companies such as Reliance Jio Platforms, Reliance Retail, OYO Hotels, and the Health Technology Co. 

“Al-Qahtani pointed out that the Saudi-Indian Business Council is working to encourage Indian investment in Saudi Arabia, identify investment opportunities in India, and transfer and localize technology in various sectors, such as space and defense,” Al-Eqtisadiah reported.   

“It also aims to exchange expertise in education and training, benefit from mutual expertise in tourism and entertainment, and cooperate in the healthcare sector, pharmaceutical and medical supplies industries, and enhance integration in logistics services,” the report added.  

Al-Qahtani added that India has invited Saudi Arabia to invest in its growing defense sector, which has opened up to private investors in recent years.  

Indian firms that have already established regional bases in Saudi Arabia include those working in automobile and bus manufacturing.  

The move by the more than 40 Indian firms comes amid a wave of multinational companies establishing regional bases in the Kingdom. 

Almost 600 international companies have set up bases in Saudi Arabia since 2021, including Northern Trust, IHG Hotels & Resorts, and Deloitte, the Saudi Press Agency reported in March. 

The growth was fueled by the government-backed Riyadh regional headquarters program, which offers incentives such as a 30-year corporate income tax exemption and withholding tax relief, alongside regulatory support for multinationals operating in the Kingdom. 

India remains a key energy partner for the Kingdom, as it imported 14 percent of Saudi Arabia’s crude oil production and 18 percent of its liquefied natural gas exports in the past year.    

Bilateral trade has also expanded in sectors such as chemicals, construction, and contracting, as well as healthcare training, and information technology.   

Total trade between the two countries reached around $42 billion in the financial year 2023-24. Of this, Indian exports to Saudi Arabia accounted for approximately $11 billion, consisting of engineering products, rice, and petroleum derivatives, as well as chemicals, food and medical supplies, and textiles.    

Saudi exports to India totaled SR31 billion ($8.2 billion), including crude oil, liquefied natural gas, fertilizers, chemicals, and plastics.   


Saudi gold investment demand up 9% in 2024 as bar purchases surge 

Saudi gold investment demand up 9% in 2024 as bar purchases surge 
Updated 32 min 14 sec ago
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Saudi gold investment demand up 9% in 2024 as bar purchases surge 

Saudi gold investment demand up 9% in 2024 as bar purchases surge 

RIYADH: Saudi Arabia’s demand for gold bars and coins rose 9 percent in 2024 to 15.4 tonnes, reaffirming the Kingdom’s position as the Gulf region’s largest investment market for the precious metal, a new report showed. 

The World Gold Council’s Gold Demand Trends Full Year 2024 report attributed the increase to heightened investor appetite for safe-haven assets amid economic uncertainty, despite a slowdown in jewelry purchases. 

The document highlighted that Saudi Arabia’s performance in the gold market aligns with a broader regional trend, with countries like the UAE and Kuwait also showing strong growth. 

Saudi investors responded to fluctuations in gold prices, taking advantage of opportunities in the market. 

In particular, demand for bars surged, while the sale of coins saw a slight decrease. The report noted that this robust performance was not limited to the first three quarters of 2024 but continued in the final quarter, with a 20 percent year-on-year increase in bar and coin purchases to 4.3 tonnes. 

Despite the strong growth in investment demand, gold jewelry consumption in the Kingdom experienced a decline, falling by 8 percent to 35 tonnes in 2024. 

This decrease reflects the impact of high gold prices, which have limited the purchasing power of consumers. 

The report indicated that the demand for gold jewelry saw a slight recovery in the fourth quarter of 2024, driven by a price dip that prompted buying. 

The World Gold Council also observed a regional trend where gold remained a key asset class for investors, particularly in the face of rising inflation and geopolitical instability. 

As the global gold price reached record highs in 2024, Saudi investors increasingly turned to gold as a hedge against these challenges. 

The UAE also registered an increase in bar and coin demand, rising 15 percent annually to 13.3 tonnes in 2024. Fourth-quarter demand in the UAE climbed to 3.4 tonnes, up from 3.1 tonnes a year earlier. 

However, jewelry consumption in the Emirates declined 13 percent over the year, totaling 34.7 tonnes, reflecting similar affordability challenges seen across the region. 

Looking ahead, the World Gold Council expects the Kingdom’s gold market to remain resilient, supported by strong investor interest in gold and its role as a hedge in uncertain times. 

The report came as gold extended its record run on Tuesday, breaching $3,500 per ounce, as weakness in the dollar, US President Donald Trump’s attacks on the Federal Reserve and trade war fears boosted demand for the safe-haven asset.

Spot gold was up 0.5 percent at $3,440.51 an ounce by 3:21 p.m. Saudi time, after rising as much as 2.2 percent to $3,500.05 earlier in the session. US gold futures climbed 0.9 percent to $3,454.60.


Saudi Arabia posts 66.7% rise in industrial licenses in February

Saudi Arabia posts 66.7% rise in industrial licenses in February
Updated 44 min 57 sec ago
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Saudi Arabia posts 66.7% rise in industrial licenses in February

Saudi Arabia posts 66.7% rise in industrial licenses in February

JEDDAH: Saudi Arabia issued 105 new industrial licenses in February, marking a 66.7 percent increase compared to January, supporting the Kingdom’s drive for economic growth and diversification. 

A total of 113 factories also commenced production during the second month of the year, representing a 9.7 percent increase in comparison with the previous month, according to a statement issued by the Ministry of Industry and Mineral Resources.

According to a report from the ministry’s National Industrial and Mining Information Center, the new licenses represent investments exceeding SR1.02 billion ($272 million) and are expected to create 1,504 jobs.

These developments are part of a broader trend in the sector. An official study revealed that 1,346 new industrial permits were issued in the first quarter of 2024, paving the way for over 44,000 new job opportunities and attracting investments surpassing SR50 billion ($13.3 billion). 

They also align with Saudi Arabia’s National Industrial Strategy, unveiled by Crown Prince Mohammed bin Salman in October 2022, which seeks to accelerate sector growth and raise the number of factories across the Kingdom to approximately 36,000 by 2035.

The strategy targets 12 sub-sectors and outlines over 800 investment opportunities, valued at SR1 trillion, with the goal of tripling the nation’s industrial gross domestic product. 

The issuance of permits also correlates with the Kingdom’s National Industrial Development and Logistics Program, launched in 2019, to support the industrial sector and drive sustainable development. 

The ministry added in its statement that factories entering the production phase attracted investments totaling SR900 million and generated 4,114 new jobs, underscoring the continued growth and expansion of the country’s industrial base as these establishments reach full operational capacity. 

Saudi Arabia’s Industrial Production Index recorded a 1.3 percent year-on-year increase in January, driven by sustained growth in manufacturing and waste management, according to the General Authority for Statistics. Monthly, the index remained steady at 103.9, unchanged from December. 

The manufacturing sub-index posted a 4 percent annual rise, supported by a 4.3 percent increase in the production of coke and refined petroleum products, as well as a 4.2 percent uptick in chemicals and chemical products. 

The report, which monitors key industrial indicators, also revealed that investments linked to newly issued industrial licenses reached SR1.197 billion, with the associated projects expected to create more than 2,500 job opportunities across the Kingdom.


IMF projects 3% growth for Saudi economy in 2025

IMF projects 3% growth for Saudi economy in 2025
Updated 53 min 57 sec ago
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IMF projects 3% growth for Saudi economy in 2025

IMF projects 3% growth for Saudi economy in 2025

RIYADH: Saudi Arabia’s real gross domestic product is expected to grow by 3 percent in 2025, with further acceleration to 3.7 percent in 2026, according to the latest World Economic Outlook released by the International Monetary Fund.

The forecast marks a downward revision of 0.3 percentage points for 2025 and 0.4 percentage points for 2026 compared to the IMF’s projections issued in January. Despite the slight adjustment, the Kingdom’s anticipated economic performance continues to outpace the global average, which the IMF estimates at 2.8 percent for 2025 and 3 percent for 2026.

“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity,” the IMF noted in its report.

Regionally, Saudi Arabia is expected to outperform several of its Gulf neighbors. The IMF projects Bahrain’s GDP to grow by 2.8 percent in 2025, followed by Qatar at 2.4 percent, Oman at 2.3 percent, and Kuwait at 1.9 percent.

The UAE is forecast to lead the Gulf Cooperation Council with a 4 percent growth rate in 2025 and 5 percent in 2026.

The IMF also predicts that inflation in Saudi Arabia will remain contained, with the average annual rate holding steady at 2.1 percent in 2025 and easing slightly to 2 percent the following year.

In a separate analysis released in December, Mastercard Economics estimated a 3.7 percent expansion for the Saudi economy in 2024, driven largely by growth in non-oil sectors.

Underscoring the Kingdom’s economic momentum, ratings agency S&P Global upgraded Saudi Arabia’s sovereign credit rating to “A+” from “A” in March, citing the country’s ongoing social and economic transformation as a key factor for the stable outlook.

Across the broader Middle East and North Africa region, the IMF anticipates economic growth to average 2.6 percent in 2025, before climbing to 3.4 percent in 2026.

Globally, the US is forecast to record GDP growth of 1.8 percent in 2025 and 1.7 percent in 2026.

Among emerging markets, India is expected to lead with projected growth of 6.2 percent in 2025 and 6.3 percent the following year. China’s economy, meanwhile, is expected to expand by 4 percent annually during the same period.