Saudi capital market’s momentum likely ongoing in H2 2024: HSBC Saudi Arabia

Faris AlGhannam, CEO and Board Member of HSBC Saudi Arabia

The Saudi capital market is expected to see continued momentum in H2 2024, backed by a strong pipeline of initial public offerings (IPOs), announced projects, and investment opportunities, which is seeing higher investor engagement by local and foreign players at record highs compared to previous years, Faris AlGhannam, CEO and Board Member of HSBC Saudi Arabia, said.

Speaking to Argaam on the sidelines of the HSBC GCC Conference in London, AlGhannam added that the Saudi stock market has seen a robust first half to the year, outperforming what had been witnessed in 2023, with the increasing depth and liquidity providing positive momentum for the second half of 2024.

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He also explained how the Kingdom’s underlying economic transformation plan and the steady stream of reforms fuel new foreign investments are driving the Saudi capital market to become the largest and most liquid among GCC nations this year.

Foreign investors are increasingly focusing on emerging markets as part of their international strategies. Saudi Arabia’s 2019 inclusion in the benchmark equity emerging markets investment indices by MSCI, FTSE Russell and S&P Dow Jones, paired with the inclusion in the EMBI sovereign bond index, accelerated inflows into the local capital market.

Moreover, the increased interest from foreign investors helped the Tadawul main market to grow by more than 11% in 2023, more than double the return on the MSCI benchmark.

According to AlGhannam, HSBC, being the largest and leading international bank in the Kingdom, has advised on more than 10 transactions in the first half of the year, including leading Dr. Soliman Abdulkader Fakeeh Hospital Co.’s (Fakeeh Care Group) $764 million IPO, the largest equity offering of its kind this year and the first ever by a Saudi healthcare player, in addition to Saudi Aramco's multi-billion dollar secondary share sale.

He also expected further innovation and development in the Kingdom’s debt, sukuk, and bond markets, which have the potential to pave the way for new routes for both domestic and foreign capital.

HSBC Saudi Arabia has been at the forefront of facilitating foreign institutional investment in the local capital market, including becoming the first Qualified Foreign Investor in 2015, and more recently, enabling the launch of Asia’s first Saudi Arabian exchange-traded fund (ETF).

According to AlGhannam, Saudi Arabia’s shift to a $1 trillion G20 economy marked a pivotal opportunity for international corporates and investors.

The HSBC GCC Conference in London is part of a global program that includes engagement across Asia, Europe and the US to support clients across the world in exploring opportunities in the Kingdom. Its network covers 90% of the world's trade and capital flows, with an on-the-ground presence in 56 markets and territories.