Saudi IPO reforms: what India-Gulf investors should check
Saudi IPO reforms are being prepared to address falling traded stocks, weak performance among newly listed companies and declining retail participation. The Saudi Capital Markets Authority (CMA) says the package is due to be introduced within the next 90 days.
Proposed reforms
The CMA is preparing reforms that would increase the retail investor share in initial public offerings, tighten regulation of algorithmic trading and short-selling, and tighten valuation requirements for new IPOs.
The CMA is considering a 30 percent minimum quota of IPOs for retail investors. The primary source for this update is AGBI’s report on the Saudi Capital Markets Authority’s IPO reforms.
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The package follows public consultations and new regulations announced by the CMA since its chairman Mazen Al-Sudairi took the position in August.
The reforms respond to a 9 percent fall in the All-Shares Index over the past 12 months and concerns that book-building oversubscriptions, including cases above 100 times, did not reflect true demand.
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