Skip to content Skip to Search
Skip navigation

MbS has huge plans for the stock market – best take him seriously

The numbers quoted by Saudi Crown Prince Mohammed bin Salman are enormous, but he has the money to realise his ambitions

Crown Prince Mohammed bin Salman Reuters/Andrej Isakovic
Crown Prince Mohammed bin Salman wants the Tadawul to be one of the world's largest stock markets

When Saudi Crown Prince Mohammed bin Salman announced a plan to put aside 300 billion riyals ($80 billion) to fund companies that agree to invest in his NEOM megacity, major investors such as Bridgewater Associates’ Ray Dalio and Ripplewood’s Tim Collins took note. As they should have. It’s a big, bold and beneficial initiative.

The crown prince aims to turn the Saudi stock market, the Tadawul, into one of the top three bourses in the world. The NEOM initial public offering scheduled for 2024 is an integral part of that plan.

Yes, there is the matter of the Tadawul’s small size, but that has to be seen in the context of the GCC’s growing importance to the global economy.

The GCC is awash with cash, fuelled by the world’s hunger for energy. But MbS’s Vision 2030 does not rely on revenues from hydrocarbons. Quite the contrary – it is all about weaning the kingdom off its dependence on oil and creating jobs for the country’s youth. Around 70 percent of the country’s population are below the age of 30.

The kingdom is one of the biggest investors in solar energy and NEOM is poised to become the world’s largest manufacturer of green hydrogen. 

The numbers mentioned by the crown prince are mind-boggling, but have to be taken seriously.

The kingdom’s economy and society have developed at breakneck speed over the past five years, ever since Vision 2030 was announced. The share of the economy that is not related to oil has also grown considerably. In the month of May, non-oil related exports grew by 26.7 percent year-on-year.

Saudi Arabia’s plan also has to be seen in the broader context of the region, where high oil and gas revenues have boosted the coffers of governments and sovereign wealth funds. One example: in 2022 Saudi is forecast to run its first budget surplus in 10 years. 

The GCC sovereign wealth funds – cumulatively worth more than $3 trillion, according to Bloomberg – have re-emerged as major investors in global deals as liquidity is drying up elsewhere amid quantitative tightening, rising interest rates, inflation and fears of recession.

The money flows go both ways: UBS Global Wealth Management has told AGBI that its clients are looking to increase their asset allocation to the region by at least 50 percent over the coming decade, driven by the exciting economic developments. 

Saudi Arabia is the GCC’s largest economy, with the region’s largest young population. This explains why MbS is on to something when he banks on foreign investors, their vision and their technologies to contribute to NEOM as well as to Vision 2030 as a whole.

Are the plans audacious? Yes. Could there be setbacks along the way? There may well be. Will there be a need to adjust regulatory frameworks to the ambitious goals? Almost certainly. However, you only move a behemoth like the Saudi economy and its society by stretching your goals.

The world economy has changed since the outbreak of the Covid pandemic. There are many clouds on the horizon of globalisation and international economic prosperity.  So, it is all the more important to watch closely what the new growth engine of the GCC – led by its largest economy – is up to. The Tadawul is doubtless set to grow in importance. 

Cornelia Meyer is a business consultant and macro-economist, CEO of Meyer Resources and chief economist at the European Family Office Alliance

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, […]