CMA identifies additional disclosure requirements for firms

Updated 17 March 2015
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CMA identifies additional disclosure requirements for firms

The Capital Market Authority (CMA) emphasizes the importance of following up on the listed companies’ disclosures by the investors and traders in the market.
The follow up would ensure taking sound investment decisions according to detailed data that reflect the operational and financial state of the company.
In this aspect, CMA has pointed out the additional disclosure requirements that must be met by the companies with accumulated losses (whose accumulated losses have reached 50 percent or more of its capital and up to the losses reaching to 100 percent of its capital).
The requirements are aimed to enable the investors and traders to follow the status of the company and its mechanism on a regular basis and inform them of the expected risks, thus help them to make their investment decisions with all the needed information available.
The Instructions and Procedures related to Listed Companies with Accumulated Losses that were applied since July 2014 state that companies whose accumulated losses have reached 50 percent of its capital should announce by the end of each month (according to its fiscal year’s calendar) its management financial statements.
That is for a period not exceeding the next 10 days of the end of each month. Monthly briefing on those statements should be available to the public until the company succeeds to reduce its losses below 50 percent of its capital.
The authority also explained that there are additional disclosure requirements for the companies with accumulated losses reaching 75 percent or more of its capital and up to the losses reaching to 100 percent of its capital and have an orange or red flag displayed in front of their name on Tadawul.
The disclosures include, in addition to the monthly financial statements approved by the board, forming a committee with at least three members - including a member of the board of directors — which is responsible for implementing the plan and informing the company’s board of directors of any related updates.
The company must also quarterly announce to the public the details of the plan implementation, including the disclosure of the quarterly and annual financial forecasts compared to the actual quarterly and annual financial statements.
CMA ensures that the companies with accumulated losses who are applicable to those procedures should also comply with all the rules and regulations mentioned on the Capital Market Law and its related implementing regulations.
The companies should comply to issue their quarterly and annual financial statements in the specified time on the regulations related. That is in addition to issuing monthly management statements.
The authority started applying those procedures based on tasks assigned to it by the Capital Market Law.
Clause (6) of Article (5) of the CML states that the authority should regulate and monitor the full disclosure of information regarding securities and their issuers, the dealings of informed persons and major shareholders and investors, and define and make available information which the participants in the market should provide and disclose to shareholders and the public.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.