The UK has become by far the largest source of qualified foreign investor trades on Tadawul, according to chair of Saudi Tadawul Group Sarah Al-Suhaimi, who said 79% of QFI trades on the Saudi exchange came from UK accounts in the third quarter.

Al-Suhaimi was speaking at the Capital Markets Forum Saudi-UK Dialogue 2024 event in London on Tuesday.

The number of QFIs has grown from around 50 in 2017 to more than 4,000 and trading activity is now 40% institutional.

"In line with this increasing growth in the market and the size and diversity of the market – we’ve actually grown from roughly the 23rd or 24th largest market in the world to now around the eighth largest market in the world – has come an increased openness to the outside world where we’ve moved from almost exclusively local investors to now slightly over US$125bn of foreign investment and growing," said chair of the Saudi Capital Market Authority Mohammed El-Kuwaiz. "And it’s actually quite opportune Saudi Arabia has been opening up to the outside world in a context when many of the countries around the world have been closing down."

Saudi Arabia has seen 35 IPOs this year across its main market and Nomu - Parallel market – the same as the whole of 2023 – and several are live in the market, including United International Holding Company. Books closed on Monday for its up to SR990m (US$264m) listing.

One deal missing from the Saudi pipeline is Lulu Group, which pivoted to a single Abu Dhabi listing having previously explored a dual Tadawul and ADX listing.

Cross-border listings are a target for the market's evolution, with Tadawul's chief strategy officer Lee Hodgkinson at Tuesday’s CMF event referencing two Chinese ETF listings as evidence of Tadawul’s growing prominence as a venue.

Progress has proved slower for single stocks, however, with no company emulating the success of Americana Restaurants' dual ADX and Tadawul listing in 2022.

Bankers on Lulu Group said the main difficulty is managing an IPO timeline with two regulators, though the door remains open for a potential secondary listing on Tadawul in future.

Source: IFR