PHOTO
The public and private markets of Saudi Arabia are growing in tandem, bucking the traditional trend in which capital allocators typically move away from public markets as they become more efficient.
Mohammed El-Kuwaiz, chairman of Saudi Arabia’s Capital Markets Authority (CMA), said that while public and private usually overlap typically, as markets become more efficient, the role of capital allocators decreases, so they move from public to private markets.
In the Gulf, the activity has moved from the traditional space of public markets to private space and alternatives.
“The interesting thing in Saudi is we are seeing growth of both of them in tandem. We are seeing growth in the public markets, and I would argue it has been one of the most unparalleled growth rates in public just simply because the rate of financialisation of our economy has been one of the most rapid in the world,” he said at the Future Investment Initiative in Riyadh.
One of the kingdom’s fastest growing segments is the alternative space, whether it is venture capital, private equity or real estate, he said.
The growth is reflective of the quantum of investment required, he said, with further growth expected to meet the estimated $3 trillion demands of Vision 2030.
(Reporting by Imogen Lillywhite; editing by Bindu Rai)
