Saudi stock exchange to hold Hong Kong forum in May

Reuters/Xiaomei Chen/SCMP

• First capital market forum overseas
• Part of drive to attract global capital
• Collaboration with Hong Kong exchange

The Saudi stock exchange operator Tadawul has chosen Hong Kong for its first capital market forum outside the country, part of a drive to make the Gulf state a global financial centre for attracting foreign capital.  

“For the first time we’re taking the Saudi Capital Market Forum beyond Saudi borders in collaboration with the Hong Kong exchange,” Khalid Alhussan, Tadawul’s CEO, told a capital markets forum in Riyadh on February 20. 

The Hong Kong event, titled CMF Connect, will take place on May 9.

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“We hope it will elevate the integration of the Saudi Capital Markets forum with the rest of the world, we hope that will be an additional value to the forum in the future,” Alhussan said. 

“We have the advantage of the Vision 2030 reforms happening. An additional one is the time zone. We are the largest economy in the region, the most liquid exchange in the region. That will help activate us as a financial hub in the region.” 

Saudi Arabia, the world’s top oil exporter, embarked on a massive development programme in 2016 in an effort to diversify the economy away from oil, raise employment and homeownership among Saudis, and attract foreign tourists and business. 

The kingdom must reduce its budget deficit and speed up regulatory reforms if it is to remain competitive in a tight global market, finance minister Mohammed Al-Jadaan told the forum on Monday. 

The government is aiming to attract an annual $100 billion in foreign direct investment by 2030, up from $33 billion in 2022. 

Alhussan said: “In 2017 we only had 50 registered qualified foreign investors. Today we are more than 3,700 owning around $85 billion of positions in the Saudi exchange, or Saudi corporates.” 

He said the CMA was also trying to encourage Saudi companies to consider listing on the stock market, including its parallel market, Nomu, which has lower equity requirements. 

Officials said this week the CMA is currently considering 56 initial public offering requests, a 30 percent increase on last year. 

The CMA has developed its debt and derivatives market as another way of attracting investment. Tadawul’s recent acquisition of a strategic stake in Dubai Mercantile Exchange is also helping provide a local pricing reference for economic sectors, Alhussan said.  

“We launched our third derivatives contract, single stock options, also to serve the diversification purpose,” he said. “The debt market has started to flourish, total issuances exceeding SAR550 billion, and we are still at the beginning.”