Saudi Arabia’s Capital Market Sees 27% Revenue Growth
Saudi Arabia’s capital market institutions experienced a 27% increase in operating income in Q2 2024, reaching $1.1 billion. The Capital Market Authority reported that asset management was the top contributor, making up 31% of the revenue with $341 million, a 22% rise from the previous year.
Investment activities followed, contributing 30% or $323 million, though this was a 15% decrease year-over-year. Dealing activities generated $161 million, showing a 22% increase and accounting for 15% of the total income. Investment-banking revenues surged by 66% to $108 million, comprising 10% of the total.
Despite these gains, net profit fell by 3% to $546 million, affected by higher non-operating expenses. The Saudi market dominated trading, with $240 billion, representing 94% of the total value traded by local institutions. U.S. markets accounted for 6.1%, totaling $15.6 billion.
Overall, total assets of these institutions rose by 29% to $19.5 billion, while liabilities jumped by nearly 69% to $7.4 billion. Shareholders’ equity increased by 13% to $12.1 billion.
According to KPMG, the Saudi stock exchange has become the world’s 10th largest by market capitalization, driven by reforms from Tadawul and the Capital Market Authority as part of Vision 2030. Increased foreign investment has played a key role in this growth.
Saudi Arabia’s capital markets have shown resilience amid global economic challenges, attracting $13.5 billion through IPOs and rights issues in 2022. This growth has been supported by improved liquidity, investor confidence, and favorable oil prices.
The CMA has launched a strategic plan for 2024-2026 to enhance the debt market and asset management industry. This plan, introduced at the Debt Markets and Derivatives Forum, includes over 40 initiatives aimed at increasing market transparency and attracting investors.
Key goals include growing the stock market’s value to 80.8% of GDP by 2025 and expanding the debt market to 24.1% of GDP. The strategy also focuses on regulatory reforms, fintech growth, and investor protection to position Saudi Arabia as a leading global financial hub in line with Vision 2030.