Real estate firms offered incentives to list on bourse
Companies who list on the Saudi Stock Exchange (Tadawul) will automatically receive the qualification certificate of the Real Estate Developer Program, meaning they will be licensed to sell off-plan properties, as part of an agreement signed between the Saudi Tadawul Group and the Off-plan Sales or Rent Program (Wafi).
The support for the housing sector will also help the government achieve one of its core Vision 2030 goals to reach 70 percent homeownership by the end of the decade, up from 47 percent four years ago and around 60 percent at present.
The move is the second incentive program to be launched in recent weeks as part of a bid to expand the number of listed firms on the Tadawul, after the Saudi Authority for Industrial Cities and Technology Zones (MODON) launched an incentive package to encourage companies to list shares in June.
Economists in the Kingdom predict a wave of initial public listings (IPOs) could be lined up for the Tadawul later this year.
One financial consultant who asked not to be named told Arab News that, from September onward, IPOs will be “coming thick and fast,” estimating that around 30 companies are currently talking to the Capital Markets Authority, the Kingdom’s stock market regulator, with a view to getting a slot for an IPO later this year.
It would be pertinent to mention here that Saudi companies accounted for two of the three IPOs in the Middle East and North Africa region during the first quarter of 2021, representing 96 percent of the amount raised, according to consultancy EY.
The two listings on the Tadawul in Q1 raised $281.6 million. That compares with $1.45 billion from four listings for the whole of 2020, which represented a 78 percent share of the MENA IPO market, EY said in a report.
Alkhorayef Water & Power Technologies raised $144 million after its retail offering was oversubscribed by 1,511 percent and the institutional offering by 6,320 percent. Theeb Rent a Car Co. collected $138 million from its IPO.