Cross-listings on Tadawul to take time

29 January 2012

Unstable market conditions to hold back listings

Poor market conditions in the region will most likely delay cross-listings on the Saudi Arabian Stock Exchange (Tadawul), following the 23 January announcement by the the Capital Markets Authority (CMA) to enable the practice. The move is expected to open up the bourse to foreigners investors by enabling them to put money directly in Saudi Arabian stocks.

Currently, foreigners are limited to share-swap transactions through international investment banks if they want to invest in companies listed on the Tadawul.

Whether cross-listing will be a success for the stock exchange remains to be seen, as it is not uncommon in the GCC, but the additional delay is not seen as a major setback.

“It is not the best time to issue shares in general, but companies will be interested to list at some point later in the year,” says Makram Azar, vice-chairman of investment banking at UK-based Barclays Capital. “People will want to tap into the liquidity of the Tadawul, which is the biggest market [in the region].”

“There will not be profound implications, it is one step towards becoming more globally integrated and opening up the capital market to foreigners,” says Arindam Das, head of HSBC securities services for the Middle East and North Africa.

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