Saudi Arabia: Flourishing Capital Markets
The oil-rich kingdom continues to dominate the capital markets in the Arabian Gulf region. After landing 44 initial public offerings (IPOs) last year, the Tadawul stock exchange in Riyadh accounted for 12 of the 14 new listings in the Gulf states in the first quarter of 2025.
Written by Gérard Al-Fil, Dubai
The IPO of the construction group Umm Al-Qura in February particularly convinced investors. This going public was 241 times oversubscribed, attracting $126 billion in investor funds.
A recent report by the Saudi Arabian Capital Market Authority (CMA)
further states that the number of investors in public and private funds reached 1.72 million in 2024. This represented an increase of 47 percent year-on-year. The total number of investment funds reached 1,549.
Furthermore, «Saudi Arabia is among the top 20 investors in US Treasury certificates,» notes economist Nasser Saidi, President of Nasser Saidi & Associates, Dubai. «In March, this Saudi Arabian share increased by 4.11% compared to February, to $131.6 billion.»
Sluggish Stock Market Performance
The only downside: the leading index, the TASI, has lost around 7 percent since the beginning of 2025. «The Tadawul market is currently underperforming compared to most leading global stock indexes,» says Nouf Alsharif, Head of Research at Jadwa Investment in Riyadh.
Alsharif cites geopolitical uncertainty between the US and China and the pressure on the price of crude oil as reasons. China is the Saudis' largest trading partner. A barrel of oil (159 litres) is trading at around $60, or 20 percent below its valuation 12 months ago. Saidi says the Saudi economy has nevertheless become more resilient to external shocks, so the primary market, the segment for IPOs will remain buoyant.
Investors Welcome
The government under de facto ruler Mohammed Bin Salman, also known as MBS, is actively promoting the expansion of capital markets, which is in line with the government's «Vision 2030» document and its «Weaning on Oil» policy.
Foreign investors in neighbouring Gulf states can trade stocks directly on the Tadawul Exchange; outside the region, share purchases are possible primarily through funds.
MBS himself is promoting the establishment of listed companies from East and West in the kingdom in order to further integrate his country into the global economy as a member of the G20. 152 of the Fortune 500 companies run offices and operations in the largest Gulf monarchy.
