Analysts expect increased activity on Saudi Arabia Tadawul

21 September 2011

Outlook for Tadawul positive compared with UAE bourses

Saudi Arabia’s capital market is one of the few in the region showing signs of picking up.

The effects of the Arab popular uprisings are beginning to fade away for the region’s largest bourse, as more companies prepare to come to market.

“Saudi Arabia is showing signs of coming back to life in terms of the number of mandates we have,” says Steve Drake, head of capital markets for consultancy Pricewaterhouse Coopers (PwC).

Already Hail Cement Company and Saudi Fisheries Company have launched their initial public offerings (IPOs), both of which are set to close in October.

According to Drake, several more are planned and activity will pick up over the next six to nine months with deferred IPOs coming to market.  

“Saudi Arabia is the biggest IPO market by virtue of its size and so will have the largest pipeline,” says Drake.

In contrast, UAE market activity has suffered this year. Besides a few regulatory listings on the Abu Dhabi Securities Exchange (ADX), there has been little activity.

“The expectation globally is that there will continue to be volatility, which will have an impact on the region, particularly on entities interested in international exchanges. And in particular for UAE-based and Kuwaiti-based entities, which have always had an interest in overseas markets, so they will face a continued downward drag on them,” says Drake.

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