The market value of the Saudi Arabian financial market has grown by 476% over the past 5 years.
Yazid bin Saleh Al Damiji, Deputy Minister of the Capital Market Authority for Strategic and International Affairs, said that the holding of the Financial Sector Conference in the Kingdom, which is one of the most important dialogue platforms that attracts decision makers in the sector and senior leaders of financial institutions, reflects the importance of the Saudi financial market, which is the largest market in the region. Since it ranked ninth among the world’s largest stock exchanges by market value by the end of 2022, it also reached fourth place among the G20 countries by the end of the year.
Al Damiji explained that Saudi Arabia’s financial market has experienced growth at many levels in recent years as the number of companies listed on the market increased from 188 companies at the end of 2017 to 269 companies listed at the end of last year. 2022 In line with this growth, the market has witnessed a huge increase in market value amounting to 9.9 trillion SAR (or the equivalent of 2.6 trillion US dollars) by the end of 2022, which is 476.5% more than in the last five years.
He added that the authorities have sought to develop the Saudi Arabian financial market in various areas related to the operation of the market, and improve the working mechanism and rules that have contributed to the development of productivity at the level of companies and sectors, and this has resulted in an increase in the number of initial public offerings and direct listings on the main and parallel market during the past year 2022 AD reached 56 compared to 34 in 2021.
And Al-Dumaji pointed out that there are still about 80 initial public offerings pending approval from the Capital Markets Authority, indicating an increase in requests and a trend for the private sector to reap the benefits. financial market as one of the alternative financing channels.
Regarding the sukuk and debt market, Al Damiji explained that the total funds raised from the offer of sukuk and debt instruments increased from SAR 37.2 billion in 2021 to SAR 53.9 billion in 2022, an increase of 44.9%.
Al Damiji explained that the boom and momentum in the financial market has resulted in total assets under management reaching 743.4 billion Saudi Riyals by the end of 2022, up 90.1% from the past five years, reaching 391 billion Saudi Riyals in 2017.
The development of the financial market has had a positive impact on market institutions and foreign investment.
Al-Dumaji pointed out that the developments observed in the Saudi financial market had a positive impact on market institutions, as their number increased significantly and reached 141 institutions, which is a 63% increase compared to their number, which reached 86 institutions at the beginning and end of 2017. . The revenues of these institutions grew by 144%, reaching 12.2 billion SAR by the end of 2022 compared to its level in 2017.
Regarding foreign investors, Al-Damiji said: “The main market saw an increase in foreign investment hitting an all-time high of up to 388% as it increased from 71 billion SAR in 2017 to 347 billion SAR by the end of the year. 2022 Foreign investor property values continued to rise, reaching 14.2% free float on the main market at the end of 2022, up from 12.8% at the end of 2020.
And continued: “In addition, since joining the global market indices, net foreign investment by the end of 2022 was about 183.9 billion Saudi Riyals, which indicates the highest net domestic flows, which are estimated at about 43 billion Saudi Riyals in 2022 alone. year. ”, explaining that the agency is constantly working on the development of the “Regulations governing foreign investment in securities” in order to increase the attractiveness and efficiency of the Saudi Arabian financial market to foreign investors, as well as increase the competitiveness of the market at the regional level. and an international level that supports the local economy by attracting new foreign capital.
The focus on financial technology is the most important characteristic of the growing maturity of the Saudi Arabian financial market.
Al-Dumaji explained that the focus on the financial technology (fintech) sector is one of the main developments that characterize the growing level of maturity of the Saudi Arabian financial market, which is an important step to compete with other financial markets, noting that by the end of 2022, the number fintech permits in the Kingdom increased to 29 permits, up 262.5% from 2020.
Al-Damiji said that the Capital Market Authority is committed to further developments in fintech, especially in relation to cryptographic securities, explaining that the body recently announced the receipt of fintech business models related to cryptographic securities in the fourth quarter of 2022 of the year. and has already received 3 applications for it. .
He added that the body, in order to provide coding, will continue to conduct research to determine the approach to the implementation of various crypto-assets in the financial market in order to study the risks associated with this and use the opportunities it provides to determine the optimal direction for regulating such activities, taking into account the development of dealing mechanisms. and keeping records and data between Dealers in the financial market in an automated technical way. In addition, the Authority will adopt a new initiative to provide an opportunity for those interested to present business models related to open financial applications in order to maximize the value of sharing customer data with other ways that add value, create and deliver new financial products. and services, as well as increase competition by allowing new competitors to enter the market and by providing the ability to aggregate data.