As we step into 2025, Saudi Arabia's capital markets are poised for continued significant growth. The Kingdom's ambitious Vision 2030 plan, aimed at diversifying the economy and reducing dependence on oil, has set the stage for a dynamic and evolving debt and equity markets in the Kingdom.
IPO momentum
One of the most promising opportunities in Saudi Arabia's capital markets is the increased foreign investment. The Saudi Exchange (Tadawul) has been actively working to attract international investors by enhancing market accessibility and transparency. The Capital Market Authority has also introduced proposals to further attract foreign issuers to the shores of the Kingdom. 2024 witnessed a high volume of activity across the board for IPOs, capital alteration transactions - such as capital increases for acquisition purposes, rights issues or otherwise - and other strategic transactions and expect this to continue over the course of the year. High profile listings across sectors such as healthcare, education, technology and fintech sectors are garnering investors' interest and confidence.
Expansion of debt capital markets
Saudi Arabia's debt capital markets are set to play an increasingly pivotal role in funding public and private sector initiatives. The issuance of sukuk continues to gain traction, driven by continued enhancements to the regulatory framework by the CMA and strong investor demand for Sharia-compliant financial instruments.
In addition, sovereign wealth funds are other quasi-government entities are likely to remain active in the debt market to secure funding for large, long term infrastructure projects. This includes exploring green and sustainability-linked debt instruments, as corporates look to progress on their sustainability commitments as the Kingdom pushes towards a greener economy.
Robust growth in 2025
Saudi Arabia's capital markets are expected to experience robust growth in 2025, driven by increased foreign investment, technological advancements, and favorable economic conditions. Both equity and debt markets will offer significant opportunities for investors, making the Kingdom an attractive destination for investors and issuers alike.
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