Saudi Arabia Allows Foreign Investors into Local IPOs, Hopes to List Aramco on Tadawul

Foreign investors are now able to participate in initial public offerings (IPO) on companies listed on the Nomu (parallel) market in Saudi Arabia, according to reports based on comments from Saudi Arabia’s Capital Market Authority (CMA) chairman Mohammed El Kuwaiz.

El Kuwaiz said Thursday that foreign investors can take part in company flotations when asked about the IPO of oil giant Saudi Aramco, according to Reuters and a report in CNBC.

Speaking at Riyadh’s Future Investment Summit on Thursday, the chairman said that non-resident foreign investors will be able to investor directly into the NOMU parallel market from January next year. NOMU is an equity market with lighter listing requirements that serves as an alternative platform for companies to go public.

Foreign investors in NOMU will no longer have to meet requirements to qualify as foreign institutional investors, but will have to continue to obey limits on foreign ownership of stocks, the chairman said, according to Reuters.

Mr. Mohammed A. El-Kuwaiz was appointed as the chairman of the board of the Capital Market Authority (CMA) of Saudi Arabia in July 2017.

Meanwhile, the Saudi Stock Market’s Chief Executive said he would like to stage Saudi Aramco’s initial public offering (IPO) on its own exchange rather than be part of a global offering with other markets, according to comments made on the sidelines of the Future Investment Initiative, now in its third day.

Khalid Al-Hussan told the Financial Times on the sidelines of the conference that he wanted the exchange to be the “exclusive” listing venue for an Aramco IPO. “Our aspiration for Tadawul, as the main exchange in the region, is to be the exclusive venue for Aramco. We are doing what it takes to make sure Aramco is listed here (in Saudi Arabia) only. We aim and work hard to be the exclusive listing venue,” he said.