Speaking at the second edition of the Saudi Capital Forum in Riyadh on Sunday, Mohammed El-Kuwaiz, chairman of the Saudi Capital Market Authority said that 2022 was a record year for the Saudi capital market, with 49 listings, as well as SR40 billion ($10.66 billion) raised in equity capital; the highest number in any single year, barring 2019 when Saudi Aramco was listed.

“Today, there are 23 of those companies on the runway, waiting for the appropriate time for an initial public offering,” said El-Kuwaiz.

He added: “2022 was a record year in terms of the number of IPOs. We had 49 listings, which includes listings in the main market, listings in Nomu, as well as listings of other investment products. Last year, the capital markets raised about SR40 billion of equity capital, which was actually the highest number that was raised in any single year barring the year of the listing of Saudi Aramco.”

According to El-Kuwaiz, Saudi Arabia was the fourth-largest market in the world in terms of the amount of equity capital raised, just below China, India, and South Korea.

The CMA chairman, however, noted that despite the flurry of applications for IPOs, the authority is very vigilant in approving these requests.

“In spite of the largest number of listings and a larger number of applications, we are also seeing a larger number of rejections. The CMA, for the first time, has started to reject files that do not meet disclosure and government standards,” he added.

Commenting on the opportunity for dual listings, El-Kuwaiz added: “We are having several discussions on dual listings. We have started to see a vibrant wave of applicants that are seriously exploring opportunities. We will create frameworks based on this interest.”

El-Kuwaiz also outlined the rapid increase of foreign investor participation in the Saudi capital market.

According to the CMA chairman, foreign investors represent less than 15 percent of free float, and they were responsible for an inflow of SR43 billion in 2022 — the highest since opening the capital market and inclusion in global indices.

“We are continuing to see a rapid increase in the proportion of foreign investors, both in terms of percent of ownership and trading. On the equity market, the feedback from foreign investors continues to be quite positive. Our expectation is that positive is never good enough. I think we need to further improve regulations to make the market more accessible,” he said.

El-Kuwaiz further pointed out that Saudi Arabia has made all necessary arrangements and regulatory reforms to make the investment process simpler in the Kingdom.

Talking about the ongoing Capital Market Forum, he said that the “number of people attending the conference is a reflection of the level of capital market activities and the level of IPO activities in the Kingdom.”