Saudi Arabia’s financial sector is undergoing a dynamic transformation, with its capital market emerging as a regional powerhouse fueled by economic diversification and strategic reforms under Vision 2030, revealed a senior industry leader.
In an exclusive interview during the Capital Market Forum, Saud Al-Tassan, CEO of EFG Hermes Saudi Arabia, underscored the Kingdom’s unprecedented market momentum. He emphasized that the Tadawul, Saudi Arabia’s stock exchange, has evolved into a magnet for high-profile private firms seeking to launch offerings, buoyed by a surge in domestic liquidity and international confidence.
“The Saudi economy is in the midst of a historic metamorphosis, propelled by Vision 2030’s ambitious agenda. This momentum is directly reflected in the capital market’s performance, which is outpacing regional peers due to its unique blend of robust local investor engagement and growing foreign inflows,” Al-Tassan told Arab News.
Domestic Demand: A Defining Competitive Edge
Unlike other markets in the Middle East, where foreign capital often dominates, Al-Tassan highlighted Saudi Arabia’s distinctive advantage: a vast pool of local investors. “While global players are increasingly active here, domestic participation remains the cornerstone of our market’s resilience. This homegrown strength provides stability and attracts issuers seeking predictable, long-term demand,” he explained.
EFG Hermes: Pioneering Innovation in a Booming Market
While remaining tight-lipped on specifics, Al-Tassan hinted at upcoming expansions in EFG Hermes’ service portfolio, positioning the firm to capitalize on the Kingdom’s financial evolution. “Innovation is at our core. We’re exploring cutting-edge solutions—from AI-driven advisory services to bespoke investment vehicles—to meet client needs in this rapidly evolving landscape,” he said.
Though securities lending currently represents a modest slice of the firm’s Saudi revenue, Al-Tassan framed it as a critical growth pillar. “This isn’t just about today’s returns; it’s about building a comprehensive ecosystem. As markets mature, these services will become indispensable,” he added.
IPO Pipeline Surges Amid Regulatory Tailwinds
Saudi Arabia’s IPO arena is witnessing a historic boom, with the Capital Market Authority reviewing a record number of listings. EFG Hermes, a dominant player in Middle Eastern equity capital markets, closed multiple high-profile offerings in 2023 and now boasts an even larger 2024-2025 pipeline.
“The quality and scale of upcoming listings are extraordinary,” Al-Tassan noted. “From energy transition pioneers to gigaproject-linked entities, these IPOs aren’t just transactions—they’re reshaping the Kingdom’s economic narrative.” The firm’s advisory roles in Mergers and Acquisitions (M&A) and Equity Capital Markets (ECM) have expanded in tandem, reflecting broader market maturation.
Foreign Capital Influx: A Regulatory Success Story
Al-Tassan credited regulatory agility for Saudi Arabia’s rising global profile. “CMA reforms—streamlined listing rules, enhanced governance standards, and investor protection frameworks—have been transformative,” he said. “As government-linked entities and private unicorns debut, we’re seeing unprecedented foreign institutional interest, particularly from Asia and North America.”
Debt Markets: The Next Frontier
While equity markets dominate headlines, Al-Tassan identified debt instruments as a strategic focus. “Vision 2030’s megaprojects require innovative financing. We’re positioning ourselves at the intersection of sovereign issuances, green bonds, and corporate debt solutions,” he stated, predicting debt markets would soon rival equities in significance.
Vision 2030: Sustaining the Growth Trajectory
Looking ahead, Al-Tassan dismissed concerns about market saturation. “Quality attracts capital. With Vision 2030 entering its execution phase, we’re not just seeing more listings—we’re seeing better ones,” he asserted. “The convergence of regulatory foresight, economic diversification, and investor appetite creates a self-reinforcing cycle. This isn’t a transient boom; it’s Saudi Arabia’s new financial reality.”
As global asset managers recalibrate portfolios for emerging market exposure, Saudi Arabia’s capital market surge, underpinned by $870 billion in Vision 2030 investments, positions the Kingdom as an indispensable destination for 21st-century capital.
Source: https://www.arabnews.com/