Skip to content Skip to Search
Skip navigation

Saudi Arabia prods blue chips to list more shares

Abdullah Binghannam, deputy head of financing and investment at the Capital Market Authority, spoke on the second day of the forum in Riyadh Saudi Capital Markets Forum
Abdullah Binghannam, deputy head of financing and investment at the Capital Market Authority, spoke on the second day of the forum in Riyadh
  • Framework out for consultation
  • Plan to increase ‘free float’
  • PIF sold telecom shares in 2021

Saudi Arabia is prodding blue-chip companies on its stock exchange to offer more shares to the public as part of a drive to become a global financial centre. 

Abdullah Binghannam, deputy head of financing and investment at the kingdom’s Capital Market Authority, told a markets forum in Riyadh on Tuesday that a regulatory framework was being put in place for follow-on market offerings. 

The framework is out for public consultation, he said, and would allow “large shareholders to float additional shares within a process that is governed and regulated, which is a catalyst for increasing free float”. 

Binghannam pointed to the example of the Public Investment Fund selling its shares in Saudi Telecom to the public in 2021. Follow-on offerings will boost a company’s weight in market indices and raise the status of Saudi capital markets in global rankings, he said. 

The Capital Market Authority is currently considering 56 initial public offering requests, officials said this week. This is a 30 percent increase on last year. Stock exchange operator Tadawul will hold its first capital market forum outside the country in Hong Kong in May

Government ministers told the Riyadh forum that debt and derivatives markets were a key priority in boosting the Saudi financial market, as well as share offerings on the publicly traded platforms.

State oil giant Aramco has said it is likely to issue a bond this year. Chief financial officer Ziad Al Murshed told the forum on Monday that the company would prioritise longer tenures of up to 50 years when issuing bonds. 

Aramco last tapped global debt markets in 2021, when it raised $6 billion from the sale of a three-tranche Islamic bond.

There are also market expectations of a second Aramco share offering in the works after Bloomberg said Aramco had approached major banks to work on a sale that could raise nearly $20 billion. 

“We see a huge opportunity in the debt market. The yield curve is being built, which helps corporates and semi-government entities in pricing,” Abdullah Alshwer, CEO of Riyadh Capital, told the forum on Tuesday. 

“The peg of the riyal to the US dollar brings comfort to international investors. Once the interest rate stabilises in the near future we expect more issuances coming up.” 

Latest articles

Aramco pipelines

BlackRock-led investors to refinance Aramco Pipelines stake

Investors in Saudi Aramco’s gas pipeline network, led by BlackRock, the world’s largest asset manager, are planning to issue $3 billion in bonds to refinance a loan that backed their purchase of a stake in the network.   The consortium of investors took a $13.4 billion bridge loan in 2021 to acquire a 49 percent stake […]

Over the first half of the year Sanad Group signed deals with international airlines including Asiana Airlines and Deucalion Aviation

Mubadala-backed Sanad Group reports 53% revenue growth

Sanad Group, the Abu Dhabi-based global aerospace engineering and leasing company, has seen revenues increase by more than half over the first six months of the year. Figures released to AGBI show revenue totalling AED2.3 billion ($620 million) was reported in the first half of the year, up from AED1.5 billion over the same period […]

Malaysia’s HSS Engineers Berhad and its emirati consultancy HSS signed the deal top oversee construction with the Baghdad municipality

UAE company in joint venture to build Baghdad metro

A Malaysian engineering company and its UAE affiliate have jointly won a $316 million contract to oversee the construction of the new Baghdad metro. The building of the planned 148-kilometre network and its 64 stations across the Iraqi capital was slated to begin this month and end in 2029. This timeline might be delayed, however, […]