The CEO of ANB Capital has underscored the importance of reinvesting funds garnered from initial public offerings (IPOs) into growth and development opportunities within Saudi Arabia. This strategic reinvestment is seen as a catalyst for propelling the national economy forward and supporting the Kingdom’s broader aspirations.
In a panel discussion at the Saudi Capital Market Forum, Khalid Al-Ghamdi emphasized that IPO proceeds should primarily facilitate the expansion of business lines, job creation, and the development of essential infrastructure. These investments not only drive growth but also have the potential to increase tax revenues and enhance shareholder value.
Under the spotlight of the conference themed Unleashing the Saudi Capital Markets Potential,
Al-Ghamdi also highlighted the impact of the National Transformation Program (NTP) on the capital market.
Our companies raised a total of $21 billion between 2016 to 2023, excluding Aramco, which matches the total raised in the eight years before the NTP launch,
he stated, noting an increase in the average size of post-NTP IPOs to $450 million from $367 million.
Al-Ghamdi revealed a shift in the use of IPO funds, with a larger percentage recently going to shareholders rather than being reinvested into the companies. Between 2008 and 2015, 53 percent of funds were reinvested, but from 2016 to 2023, only 15 percent were put back into the businesses,
he explained.
Mohamed Al-Rumaih, CEO of the Saudi Exchange, also reflected on the capital market’s vital role in economic stimulation. The Exchange has seen over 120 listings in three years and assisted in financing over $100 billion. He underscored the significance of foreign investments, noting the dramatic increase in qualified foreign investors in the Kingdom.
The forum, organized by the Saudi Tadawul Group, serves as a platform for transformative discussions and innovation, promoting the integration of emerging and established financial markets. Economist and policy adviser Mahmoud Khairy highlighted the forum’s alignment with Vision 2030 objectives, including promoting transparency, good governance, and attracting both domestic and international investments.