{"id":127024,"date":"2025-09-07T17:28:11","date_gmt":"2025-09-07T17:28:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/127024\/"},"modified":"2025-09-07T17:28:11","modified_gmt":"2025-09-07T17:28:11","slug":"saudi-arabia-leverages-architecture-and-culture-to-project-soft-power","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/127024\/","title":{"rendered":"Saudi Arabia leverages architecture and culture to project soft power"},"content":{"rendered":"


\n\tRIYADH: The Saudi Exchange is proving resilient amid a global initial public offerings downturn, highlighting the strength and dynamism of its diverse issuer base.\u00a0<\/p>\n


\n\tWhile traditional financial centers struggle, the Kingdom continues to attract listings, underscoring a potential shift in how and where global capital is deployed.<\/p>\n


\n\tAcross the US, Europe, and much of Asia, 2025 has seen subdued IPO activity, affected by volatile macroeconomic indicators, persistent inflation, and shifting investor sentiment. Could Saudi Arabia\u2019s divergence signal a broader reshaping of investor priorities and market leadership?<\/p>\n


\n\tEquity markets showed early signs of recovery in the first quarter, but geopolitical tensions and tariff shocks in April disrupted momentum, prompting issuers to delay offerings and adopt a cautious stance, according to Haitham Aljabry, capital markets consulting partner at PwC Middle East.<\/p>\n


\n\tIn contrast, the Saudi Exchange is charting its own path. As of August 2025, 33 new listings have been completed across its main market, Nomu \u2013 parallel market, and sukuk and bonds market, bringing the total number of listed securities to more than 460.<\/p>\n


\n\t\u201cThe Saudi Exchange\u2019s resilience amid the global IPO slowdown underscores the strength and dynamism of our diverse issuer base,\u201d Nasser Alajaji, chief of listing at the Saudi Exchange, told Arab News.<\/p>\n


\n\tAlajaji added: \u201cRecent listings from new sectors such as aviation and e-commerce have further deepened market breadth and enhanced its appeal.\u201d\u00a0<\/p>\n

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\n\tHe highlighted the launch of the Kingdom\u2019s first ESG-focused exchange-traded fund and two corporate sukuk as signs of ongoing innovation aligned with the Financial Sector Development Program under Vision 2030.<\/p>\n


\n\t\u201cGlobal IPO activity paused, as some companies chose to delay their IPO processes due to the level of uncertainty associated with the various tariff announcements,\u201d Aljabry explained. \u201cHowever, the gradual reopening of selective IPO markets is now underway, with sentiment largely tied to macroeconomic and geopolitical stability.\u201d<\/p>\n


\n\tAljabry said Saudi Arabia\u2019s sustained IPO performance reflects strong macroeconomic management, regulatory clarity, and ongoing reforms across sectors. The government\u2019s commitment to economic diversification through megaprojects such as Neom and the Red Sea is bolstering investor confidence and stimulating activity across industries. Capital inflows have also remained consistent in 2025, supported by a stable riyal-dollar peg and Saudi Arabia\u2019s status as a regional safe haven amid wider geopolitical instability.<\/p>\n


\n\tStructural advantages boosting Tadawul\u2019s appeal

\n\tTadawul offers structural advantages that distinguish it from global peers.<\/p>\n


\n\t\u201cTadawul is the largest stock exchange in the MENA region by market capitalization. Its high free-float requirement ensures liquidity, and Tadawul\u2019s inclusion and weighting in MSCI EM and FTSE indices boosts demand from passive global funds,\u201d Ibrahim Soumrany, partner at Gibson Dunn in Riyadh, noted.<\/p>\n


\n\tSoumrany also cited strong valuation premiums, robust institutional demand, and consistent oversubscription levels in retail tranches, with new listings often leaving individual investors with as few as ten shares. Additional drivers include state asset privatizations, Public Investment Fund divestments, and IPOs by large family conglomerates seeking succession planning and liquidity.<\/p>\n


\n\t\u201cThe level of capital inflow into the Saudi market since the beginning of the year suggests that investors, both local and international, continue to view the Kingdom as a stable and growth-oriented investment destination, even as global capital markets remain cautious,\u201d Aljabry said.<\/p>\n


\n\tRegulatory momentum

\n\tSaudi capital markets benefit from a deepening institutional investor base and growing digital engagement, particularly among younger retail investors accessing equities via trading apps.<\/p>\n


\n\t\u201cThe Saudi capital market continues to play a pivotal role in driving economic diversification and attracting global capital,\u201d Alajaji said. \u201cWe continue to observe steady IPO activity across all our platforms\u2026 Investor demand remains robust, supported by a favorable regulatory environment and active participation from both institutional and retail investors.\u201d<\/p>\n


\n\tAccording to Aljabry, IPOs in Saudi Arabia during 2025 have predominantly involved well-established or strategically significant companies aligned with Vision 2030, appealing to long-term investors. Despite fluctuations in crude oil prices, the Kingdom has attracted significant capital inflows, reflecting confidence in its long-term growth strategy and stable economic management.<\/p>\n


\n\tIn terms of liquidity and market-making, Saudi capital markets stand out. Soumrany emphasized that market-making regulations support tighter bid-ask spreads and consistent trading activity, enhancing the investor experience and reducing market volatility.<\/p>\n


\n\tFurther contributing to market dynamism is the growing role of Qualified Foreign Investors. As of August, over 4,400 QFIs were registered with the Saudi Exchange, highlighting rising international institutional interest, Alajaji told Arab News.<\/p>\n


\n\tThe evolution of environmental, social and governance and sustainability-linked products is also adding new dimensions to the market. Alajaji noted that the introduction of new asset classes and sustainability-driven instruments reflects the exchange\u2019s commitment to long-term innovation.<\/p>\n


\n\tRetail investor enthusiasm remains a key pillar. Soumrany noted: \u201cHigh oversubscription levels in retail tranches. Retail investors are unlikely to receive more than 10 shares due to high oversubscription levels.\u201d\u00a0<\/p>\n


\n\tSome IPOs have been so oversubscribed that retail investors received only a fraction of their applications, demonstrating grassroots engagement in Saudi capital markets.<\/p>\n


\n\tOutlook

\n\tLooking ahead, Aljabry believes the momentum of Saudi IPOs is unlikely to slow. With a predictable pipeline shaped by PIF exits, state divestments, and family business listings, the exchange is well-positioned to maintain its upward trajectory.<\/p>\n


\n\tThe alignment between economic diversification objectives and capital market development ensures that listings will continue to be both strategic and impactful. Soumrany said this alignment results in IPOs that are not only financially attractive but integral to the broader national transformation.<\/p>\n


\n\tTadawul\u2019s strength amid global weakness underscores its evolution into a leading regional financial hub. As global investors seek resilient, growth-oriented markets, Saudi Arabia is increasingly viewed as a compelling alternative to traditional financial centers. With robust infrastructure, regulatory foresight, and strategic positioning, the Kingdom is not just weathering the global IPO slump \u2014 it is defining a new benchmark for emerging-market exchanges.

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