Saudi Arabia advances in global competitiveness indicators related to stock market: CMA

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Saudi Arabia advanced in the stock market index, according to the Global Competitiveness Report 2022 issued by the International Institute for Management Development (IMD).

The Kingdom jumped in nine out of 12 indicators related to stock markets, while it maintained its position in three indicators compared to 2021.

According to the report, the state came first in the stock market capitalization index and shareholders' equity index, while it ranked second in the stock markets and venture capital indices. The Kingdom took the third position in the initial public offering and boards of directors index within the G-20. Accordingly, it was positioned as one of the top three ranks in six out of 12 indicators related to the stock market at the G-20 level.

This progress reflects the various efforts and measures applied in the stock market recently to develop the stock market sector and apply the best international practices.

The Capital Market Authority (CMA) confirmed that it seeks to achieve the Kingdom's Vision 2030, through achieving advanced positions in several global competitiveness indicators.

The authority cited its recent efforts and measures including its approval of the instructions for international securities depository centers that regulate the procedures for requests to link international securities depository centers with the Securities Depository Center Company (Edaa). This aims to raise the efficiency and attractiveness of the Saudi market to foreign investors.

Furthermore, the CMA enabled the listing of real estate investment traded funds (REITs), closed-ended investment funds, and exchange-traded funds in the parallel market, which will provide a modern financing channel for this type of fund of a size that does not meet the requirements of offering in the main market.

The efforts also included the development of several aspects related to governance and disclosure of investment funds to raise the level of governance and transparency in the stock market in line with best practices and international standards.

The market regulator has recently succeeded in joining several international indices, which would make the local stock market of interest to foreign investors. This includes joining the FTSE Russell emerging markets index for government bonds (FTSE Emerging Markets Government Bond Index - EMGBI), as a result of the joint efforts between CMA and all relevant authorities. The move will contribute to expanding the base of investors in the stock market, improving levels of liquidity, and attracting the liquidity of foreign investors.