The Saudi Capital Market Continues to Set Annual Records in 2023.

The Capital Market Authority (CMA) issued its 2023 annual report, highlighting significant leaps and record achievements in various regulatory and legislative aspects, as well as developmental and investment product areas. During the past year, CMA approved a new regulation and amended four other regulatory regulations, rules, and instructions. That year also saw the approval by the Council of Ministers of the Real Estate Contributions Law, all in the continuous effort to develop legislation and regulations governing the capital market, according to the annual report issued today.

According to the Annual Report, the Rules for Foreign Investment in Securities was approved. Additionally, amendments were made to regulations, rules, and instructions, including the Implementing Regulations of the Companies Law for Listed Joint Stock Companies, the Capital Market Institutions Regulations, the Instructions for Company Announcements, and the Investment Accounts Instructions. Additionally, the Real Estate Contributions Law, implemented in collaboration with the Real Estate General Authority (REGA), received approval from the Council of Ministers.

In the report, CMA revealed several positive developments in the sukuk and debt instruments market over the past year. Among these developments were the adoption of the Debt Market Development Strategy and the cancellation of the Authority's share of the trading commission on sukuk and bonds to stimulate secondary market activities for debt instruments and overall liquidity.

According to the report, the size of the sukuk and debt instruments market reached 18.3% of the GDP by the end of 2023. The number of sukuk and debt instruments listed on the capital market totalled 70, with the funds raised from sukuk and debt instrument offerings amounting to SAR 29.95 billion, including SAR 29.85 billion from private placements and SAR 100 million from public offerings.

Regarding foreign investment in the Saudi capital market, 2023 witnessed unprecedented record levels, with net foreign investments reaching SAR 198 billion, an increase of 7.7% compared to 2022. The ownership of foreign investors continued to rise, reaching SAR 401 billion by the end of 2023.

Additionally, the past year saw the number of offerings and listings in the Saudi capital market reach 43 listings during 2023, marking a 79% increase from the target listings for the same year. This included the public offering of shares of 7 companies in the main market, the listing of 29 companies in the parallel market, the direct listing of shares of 6 companies in the parallel market, and the listing of a traded real estate fund.

At the inspection level, in accordance with CMA responsibilities, 37 permits were inspected, including 23 routine inspections and 14 cause inspections. On the regulatory side, intensive investigations into suspicious trading activities increased from 859 cases in 2022 to 1019 cases, an 18.6% increase, resulting in 7 cases of suspected violations and 59 regulatory inquiries.

The Annual Report also stated that the total number of complaints received by the CMA in 2023 amounted to 7,025, of which 5,056 complaints were settled, and 1,047 complainants were directed to the Committee for the Resolution of Securities Disputes (CRSD), while 855 complaints are under study.

In fulfilling its role in investor protection, CMA concluded 146 cases and executed 179 sanction decisions against violators of the Capital Market Law (CML) and its implementing regulations. Additionally, 579 investors were compensated with amounts exceeding SAR 245 million by final decisions issued by the CRSD.

On the judicial level, the total amount of fines and financial penalties issued by CMA and CRSD against violators of the regulations under the Authority's jurisdiction amounted to SAR 1.395 billion, of which SAR 375.35 million were collected.

As a result of these efforts and achievements, the Kingdom positioned itself at the top of several global financial market indicators, ranking first among G20 countries in the Board of Directors Index, and second in the Ease of Access to Financial Markets Index, Stock Market Capitalization Index, Shareholder Rights Index, and Venture Capital Index. According to the IMD World Competitiveness Yearbook, the Kingdom improved its ranking in 6 out of 12 financial market indicators and maintained its ranking in 2 indicators compared to 2022.

His Excellency Mr. Mohammed Elkuwaiz, Chairman of the Capital Market Authority, praised the achievements of the Saudi capital market over the past year, noting that CMA continues its efforts to fulfill its role alongside its partners in the Financial Sector Development Program (FSDP).

The Chairman emphasized that CMA is on its path towards further development and advancement of the Saudi capital market to be at the forefront of global markets, noting that CMA has completed its strategic plan for the years 2021-2023 and is preparing to announce its new strategic plan upon approval by the Authority's Board. The new plan's objectives are designed to align with Saudi Vision 2030.

The Capital Market Authority achieved record numbers in 2023 within the performance indicators outlined in its strategic plan for 2021-2023, surpassing targets in 9 out of 13 strategic indicators, meeting targets in 2 indicators, and nearing targets in the remaining 2 indicators. ​