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SAUDI
ARABIA: Industry observers have projected that the kingdom’s
capital market would witness increased interest and activities this
year. Bearing testament to this expectation, two financial institutions
this week demonstrated their interest in the country’s equity market.
In
an announcement on Tadawul yesterday, Al Rajhi Capital has received
regulatory approvals to launch its first Sukuk-investing mutual fund.
Earlier in January, the company revealed its intentions to expand its
Sukuk business on the back of improving investor appetite for equities
and regulatory initiatives to develop the equity markets. Issuance of
Sukuk in Saudi Arabia have surged on the back of increased liquidity
and comparatively low borrowing costs, and as corporates look to
diversify their funding sources from the traditional mode of bank
financing.
Similarly,
Saudi Kuwaiti Finance House, a wholly owned subsidiary of Kuwait
Finance House introduced the Baitk IPO Fund, a collective investing
tailored for investors who wish to achieve actual returns that are
competitive to the returns of other enlisted shares investing products.
According to CEO, Tarek Al-Rakhemi, the fund comes in light of the
remarkable and continuous improvement in the Saudi stock market index,
in addition to the appealing investment environment, and rewarding
investment opportunities in the Saudi market.
Numerous
market participants have indicated a comeback for the Saudi capital
market. The IPO scene anticipates the float of: Al-Hokair Group, one of
the largest hospitality firms in the Middle East; the kingdom’s largest
lender, National Commercial Bank; as well as other healthcare chains
and corporates looking to diversify their funding sources. Several
listings are expected to emerge in the second half of 2014 as the Saudi
equity market maintains its strong economic growth supported by
companies that serve the local economy and that have limited reliance
on international demand.
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