Foreign daily trading rises to 21% in Q3 2024 on regulatory amendments: CMA official

Fahad Hamdan, Assistant Deputy of Investment at the Capital Market Authority (CMA)

Fahad Hamdan, Assistant Deputy of Investment at the Capital Market Authority (CMA), said the authority cancelled commission fees on the purchase and sale of sukuk and debt instruments. The move aimed to reduce costs and stimulate the secondary market, and thus enhance liquidity and attract more investors and issuers.

Speaking at the Capital Markets Forum in Riyadh, Hamdan highlighted that recent regulatory amendments significantly increased the percentage of foreign daily trading to more than 21% by the end of Q3 2024, compared to 4% previously.

Additionally, foreign ownership surged to SAR 366 billion, marking a surge of nearly 1,300%.

Foreign investors play a key role in covering both primary and secondary offerings, with their average participation doubling to 200% of the institutional offerings between 2020 and 2022. This reinforces their role in supporting the economy through the financial market.

Hamdan also emphasized that the amendments align with the CMA's efforts to develop the financial market and enhance its attractiveness to both local and foreign investors.

He also highlighted that improving the investment environment strengthens the market’s role in financing the local economy. Furthermore, increased liquidity and investor diversity help reduce market volatility, benefiting local investors through stabilizing prices and improving market efficiency.

The amendments also provide listed companies with broader access to diverse funding sources to support their expansion plans, the official said.

This also contributed to facilitating listing processes, leading to a 70% increase in the number of listings over the past four years, bringing the total number of listed companies to nearly 350 in both the Main Market and the Nomu-Parallel Market.

Additionally, the number of companies listed on the Nomu rose from five companies to more than 106 currently.

The CMA’s effort in developing the financial market system helped the Saudi market join the MSCI and FTSE emerging market indices. Accordingly, foreign capital inflows increased with enhanced market liquidity, which supported its transition to the ranks of advanced markets.

Hamdan affirmed that the CMA continues to develop regulations governing foreign investment and to ease entry requirements in order to enhance the competitiveness of the Saudi financial market. This aligns with the objectives of Vision 2030, aiming to establish the financial market as a global investment hub.