Saudi Capital Market Sets Record Achievements in 2023

The Capital Market Authority (CMA) of Saudi Arabia has released its 2023 annual report, revealing record-breaking achievements across regulatory, legislative, and investment domains. The report, issued on June 27, 2024, highlights a year of significant progress, including the approval of a new regulation, amendments to four existing regulations, and the landmark Real Estate Contributions Law approved by the Council of Ministers. These developments underscore the Kingdom’s commitment to enhancing its capital market infrastructure in line with Saudi Vision 2030.

Context and Background

The CMA’s 2023 annual report reflects the Kingdom’s ongoing efforts to develop a robust and dynamic capital market. Key regulatory advancements include the approval of the Rules for Foreign Investment in Securities, amendments to the Implementing Regulations of the Companies Law for Listed Joint Stock Companies, the Capital Market Institutions Regulations, the Instructions for Company Announcements, and the Investment Accounts Instructions. The Real Estate Contributions Law, implemented in collaboration with the Real Estate General Authority (REGA), further demonstrates the CMA’s proactive approach to legislative reform.

Key Details

The sukuk and debt instruments market saw remarkable growth, with its size reaching 18.3% of GDP by the end of 2023. A total of 70 sukuk and debt instruments were listed, raising SAR 29.95 billion, primarily through private placements. The adoption of the Debt Market Development Strategy and the cancellation of the CMA’s share of trading commissions on sukuk and bonds were pivotal in stimulating secondary market activity and enhancing liquidity.

Foreign investment in the Saudi capital market reached unprecedented levels, with net foreign investments totaling SAR 198 billion, a 7.7% increase from 2022. Foreign ownership rose to SAR 401 billion by year-end. The market also witnessed 43 listings, a 79% increase from the target, including seven main market IPOs, 29 parallel market listings, six direct listings, and one real estate fund.

Regulatory oversight was intensified, with inspections increasing to 1,019 cases from 859 in 2022. The CMA concluded 146 cases and executed 179 sanction decisions, compensating 579 investors with over SAR 245 million. Fines and penalties issued by the CMA and the Committee for the Resolution of Securities Disputes (CRSD) amounted to SAR 1.395 billion.

Implications and Impact

These achievements have positioned Saudi Arabia at the forefront of global financial market indicators. The Kingdom ranked first among G20 countries in the Board of Directors Index and second in the Ease of Access to Financial Markets Index, Stock Market Capitalization Index, Shareholder Rights Index, and Venture Capital Index. According to the IMD World Competitiveness Yearbook, the Kingdom improved its ranking in six out of twelve financial market indicators, maintaining its position in two.

Mohammed Elkuwaiz, Chairman of the CMA, praised the accomplishments, emphasizing the CMA’s dedication to advancing the Saudi capital market to be among the world’s best. He noted that the CMA has completed its strategic plan for 2021-2023 and is preparing a new plan aligned with Saudi Vision 2030.

Vision 2030 Alignment

The CMA’s record-breaking performance in 2023 directly supports Saudi Vision 2030’s goal of creating a diversified and sustainable economy. By fostering a transparent and efficient capital market, the CMA attracts foreign investment, stimulates economic growth, and reinforces the Kingdom’s role as a global financial hub. The upcoming strategic plan will continue to drive innovation and development, ensuring the Saudi capital market remains a key pillar of the Kingdom’s prosperity.

20 Questions

Q1. What was the size of the sukuk and debt instruments market as a percentage of GDP by the end of 2023?

A1. The size of the sukuk and debt instruments market reached 18.3% of GDP by the end of 2023.

Q2. How many sukuk and debt instruments were listed on the Saudi capital market in 2023?

A2. A total of 70 sukuk and debt instruments were listed on the Saudi capital market in 2023.

Q3. What was the total amount raised from sukuk and debt instrument offerings in 2023?

A3. The total funds raised from sukuk and debt instrument offerings amounted to SAR 29.95 billion.

Q4. What was the net foreign investment in the Saudi capital market in 2023?

A4. Net foreign investments reached SAR 198 billion in 2023, an increase of 7.7% compared to 2022.

Q5. How much did foreign ownership in the Saudi capital market reach by the end of 2023?

A5. Foreign ownership in the Saudi capital market reached SAR 401 billion by the end of 2023.

Q6. How many listings occurred in the Saudi capital market in 2023?

A6. There were 43 listings in the Saudi capital market in 2023, marking a 79% increase from the target.

Q7. How many companies conducted public offerings in the main market in 2023?

A7. Seven companies conducted public offerings in the main market in 2023.

Q8. How many companies were listed in the parallel market in 2023?

A8. Twenty-nine companies were listed in the parallel market in 2023.

Q9. How many direct listings of shares occurred in the parallel market in 2023?

A9. Six direct listings of shares occurred in the parallel market in 2023.

Q10. What was the total amount of fines and financial penalties issued in 2023?

A10. The total amount of fines and financial penalties issued by the CMA and CRSD amounted to SAR 1.395 billion.

Q11. How many investors were compensated by final decisions issued by the CRSD in 2023?

A11. A total of 579 investors were compensated with amounts exceeding SAR 245 million by final decisions issued by the CRSD in 2023.

Q12. How many complaints did the CMA receive in 2023?

A12. The CMA received 7,025 complaints in 2023, of which 5,056 were settled.

Q13. How many inspections were conducted by the CMA in 2023?

A13. The CMA conducted 37 inspections in 2023, including 23 routine inspections and 14 cause inspections.

Q14. What was the increase in investigations into suspicious trading activities in 2023?

A14. Investigations into suspicious trading activities increased by 18.6% in 2023, reaching 1,019 cases.

Q15. How did Saudi Arabia rank among G20 countries in the Board of Directors Index?

A15. Saudi Arabia ranked first among G20 countries in the Board of Directors Index.

Q16. In which indices did Saudi Arabia rank second among G20 countries?

A16. Saudi Arabia ranked second in the Ease of Access to Financial Markets Index, Stock Market Capitalization Index, Shareholder Rights Index, and Venture Capital Index.

Q17. What did Mohammed Elkuwaiz, Chairman of the CMA, emphasize about the CMA’s achievements?

A17. Mohammed Elkuwaiz praised the achievements and emphasized the CMA’s dedication to advancing the Saudi capital market to be among the world’s best, aligning with Saudi Vision 2030.

Q18. What new law was approved by the Council of Ministers in 2023 related to real estate?

A18. The Real Estate Contributions Law, implemented in collaboration with the Real Estate General Authority (REGA), was approved by the Council of Ministers in 2023.

Q19. What strategic plan did the CMA complete in 2023?

A19. The CMA completed its strategic plan for 2021-2023 and is preparing to announce a new strategic plan aligned with Saudi Vision 2030.

Q20. How did the CMA’s efforts in 2023 contribute to Saudi Vision 2030?

A20. The CMA’s efforts in 2023 contributed to Saudi Vision 2030 by fostering a transparent and efficient capital market, attracting foreign investment, and reinforcing the Kingdom’s role as a global financial hub.

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