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Saudi Tadawul to Offer 36 Mn Share in IPO

Tadawul prepares for initial public offering (Asharq Al-Awsat)
Tadawul prepares for initial public offering (Asharq Al-Awsat)
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Saudi Tadawul to Offer 36 Mn Share in IPO

Tadawul prepares for initial public offering (Asharq Al-Awsat)
Tadawul prepares for initial public offering (Asharq Al-Awsat)

The Saudi Tadawul Holding Group, the kingdom's stock exchange, announced its intent to proceed with an initial public offering after receiving approval from the Capital Market Authority (CMA).

CMA said on Wednesday it approved an initial public offering of Tadawul of 36 million shares, which represents 30 percent of Tadawul's share capital.

Tadawul chairwoman Sarah al-Suhaimi said that the announcement marks a significant milestone in the company's growth story.

Suhaimi indicated that the announcement is a "natural next step as we emerge as a Saudi powerhouse with a global mindset that can leverage scale, innovation, and execution capabilities to drive long-term value for all our stakeholders."

The listing will help achieve the "nationwide goal of the successful delivery of Saudi's Vision 2030", which is "aligned" with the strategy of the Public Investment Fund (PIF), she added.

CMA CEO Khalid al-Hussan, said the institutional offering will be on November 21 over six days, while individuals' offering will be on November 30 for three days, indicating that nearly $133 million have been achieved in 2020.

The company said that all the offered shares would be delivered to institutional investors, with a clawback to retail investors of up to 10 percent of the offered shares.

The Tadawul Group includes in its portfolio four wholly-owned subsidiaries: the Saudi Tadawul Company, one of the largest financial markets in the world in terms of market capitalization, the Securities Depository Center Company (Edaa), the Securities Clearing Center Company (Muqassa), and Wamid, the applied technology services business and innovation arm of the group.

Tadawul is characterized by a diversified and interconnected business model, allowing the company to provide a full range of products and services related to the financial markets.

In accordance with Saudi regulations, CMA's approval is valid for a period of six months from the date of issuance. It will be annulled if the offering and listing of the shares are not completed during this period.

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Saudi Arabia Eyes Asian Investments via Shenzhen, Shanghai

Group photo of the listing (Asharq Al-Awsat)
Group photo of the listing (Asharq Al-Awsat)
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Saudi Arabia Eyes Asian Investments via Shenzhen, Shanghai

Group photo of the listing (Asharq Al-Awsat)
Group photo of the listing (Asharq Al-Awsat)

The Saudi financial market has undergone a significant transformation since the launch of Saudi Vision 2030.
The initiatives, programs, and regulatory reforms associated with Vision 2030 have encouraged international investors, index providers, and financial institutions to join the Saudi market.
The Public Investment Fund (PIF) has worked to achieve the objectives of Saudi Vision 2030 by implementing mechanisms that enhance the pace of attracting foreign investments to the Kingdom.
This includes stimulating international investors, particularly Asian investors, to invest in the Saudi financial market. One notable development is the listing of the first batch of exchange-traded funds (ETFs) in the Saudi market, such as the Saudi China Southern CSOP Fund and the Saudi Huatai-PineBridge CSOP Fund on the Shenzhen and Shanghai stock exchanges in China.
During the announcement of the listing on the Shenzhen Stock Exchange, PIF Governor Al-Rumayyan Yasir stressed that these listings are an important step toward enhancing communication among the financial markets of Saudi Arabia and China.
They will provide Asian investors with the opportunity to access the Saudi financial market and observe its sustainable growth driven by the Kingdom's economic transformation.
These two new funds are part of the first batch of ETFs in China capable of investing in the Saudi financial market.
They rely on the model known as listed ETFs, which allow investors to track the FTSE Saudi Arabia Index and invest in the largest market in the Middle East.
This enables investors to gain greater access to one of the fastest-growing and most strategic markets in the world and observe the performance of 56 leading large and medium-cap companies listed on the Saudi stock exchange (Tadawul).
The new listing comes as part of the efforts initiated by the PIF to enhance investment flows into the Saudi Arabian capital market.
During the announcement of the listing process on the Shenzhen Stock Exchange, Al-Rumayyan emphasized that the listing operations are an important step toward enhancing communication between the financial markets in Saudi Arabia and China.
He added that these operations will provide Asian investors with the opportunity to access the Saudi Arabian capital market and observe its sustainable growth driven by the economic transformation in the Kingdom.