The head of investment banking at Saudi Fransi Capital, Moataz Al-Anqari, said in an interview with Al-Arabiya, that there is more than one factor for the high levels of liquidity in the Saudi stock market during 2021, and the increasing pace of initial offerings.
Al-Anqari stated that the average daily trades during the year 2021 amounted to 8.8 billion riyals, compared to 3.36 billion riyals daily rate in 2019.
He pointed out that the large coverage of the initial offerings in the market reflects the confidence of investors in the economic growth of the Kingdom, as well as confidence in companies in particular, especially after overcoming the economic consequences associated with the Corona pandemic.
The Head of Investment Banking pointed to the support provided by the financial market structuring, which has changed in the past 5 years to keep pace with the best global markets, stressing that it is one of the initiatives of the Financial Sector Development Program and one of the pillars of the Kingdom’s Vision 2030.
Regarding the high pricing of the new shares, Al-Anqari explained that this is due to the good companies’ fundamentals, the investors’ confidence in the company’s future and the liquidity in the market, and the desire to invest, in addition to the role of financial advisors in promoting propositions.
Regarding the acceleration of the listings’ pace, Al-Anqari stated that the good economic conditions in terms of liquidity, market structure in infrastructure and general economic indicators are important factors in accelerating new listings.
He continued, “The year 2021 witnessed the approval of 9 initial offerings, compared to 3 in 2020, and 5 in 2019. The financial market announced that it had received 70 applications for listing in 2021, and during December 12 applications were approved for offering 4 of them in the main market and 8 in the parallel market.
Al-Anqari stated that this gives a great impetus and a strong indication that the year 2022 will be positive in the IPO market.
He revealed that it is difficult to predict who will bid in 2022, but it is certain that the proposals will be strong as long as the supporting factors are present, such as strong economic growth and all positive general economic data.
On the other hand, Al-Anqari said that there is a global and local tendency to offer fast-growing or venture capital companies, noting that the five largest companies in the US market are specialized in technology.
He explained that Saudi Arabia is seeking to catch up with this rapidly, given that 60% of its population is under the age of 35, adding: “We have a rising generation interested in technology and high in the use of technology… As long as the infrastructure is developed in the Kingdom, it will be a cornerstone for capital companies’ subscriptions.” The bold.”
He stressed that all the ingredients for success exist to invest in technology inside Saudi Arabia, amid the availability of capital, the desire to invest, and the young generation interested in new technologies.