Riyadh, Seoul eye trade expansion

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Updated 06 March 2015
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Riyadh, Seoul eye trade expansion

South Korean President Park Geun-hye has called on Saudi and Korean businesspeople to diversify commercial cooperation with an emphasis on nuclear energy, renewable energy, education and health care.
Park said she hoped the two countries would drive the development of the energy industry over the next 20 years. She was speaking at a crowded Saudi-Korean Business Forum here.
The high-profile gathering was attended by several top Saudi and Korean officials, and 300 business leaders from both countries. These included Tawfiq Al-Rabiah, minister of commerce and industry; and Ibrahim Al-Assaf, minister of finance.
Abdullatif A. Al-Othman, governor of the Saudi Arabian General Investment Authority (SAGIA); Korean Ambassador Kim Jin-soo; Abdulrahman Al-Zamil, chairman of the Council of Saudi Chambers; and Park Youngmaan, chairman of the Korean Chamber of Commerce and Industry, were also present.
Park also held separate talks with Prince Alwaleed bin Talal, chairman of Kingdom Holding Company.
She met members of the Korean community and answered their questions in a separate session at a local hotel. Later on Wednesday afternoon, the South Korean president met with Hashim Abdullah Yamani, chief of the King Abdullah City for Atomic and Renewable Energy, who has been leading Saudi Arabia’s plans to construct nuclear power plants.
The Korean ambassador told Arab News that “a total of 12 agreements — both public and private sector — have been signed so far.” This includes a joint study on water desalination, and further agreements in the construction and automobile industries.
Saudi Arabia’s Public Investment Fund and POSCO Engineering and Construction, an affiliate of the South Korean steel giant, signed an MoU to help the Kingdom develop its own car industry. The deal could be worth around SR4.8 billion. There is speculation that the steelmaker is seeking to sell a 40 percent stake in its construction arm to improve its financial health.
Speaking during the business forum, Al-Rabiah said the trade volume between the two nations exceeded SR170 billion last year with Saudi exports to that country totaling about SR133 billion. “Korean investments in the Kingdom total SR3.4 billion, mostly in industrial and service sector projects,” said SAGIA chief Al-Othman.
Saudi Arabia is South Korea’s fourth-largest trading partner. The two countries have forged closer ties in many sectors. Park visited Masmak Fort before wrapping up her two-day visit to Riyadh. She left for Abu Dhabi on Wednesday evening.


Non-Saudi Gulf companies get ready to joint list on Tadawul

Updated 25 April 2019
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Non-Saudi Gulf companies get ready to joint list on Tadawul

  • Two companies, from UAE and Bahrain, about to submit documentation, bourse CEO tells Arab News
  • Joint listings for other Gulf stocks would be an important step in Tadawul’s ambition to be the dominant stock market in the region

RIYADH: Tadawul, the Saudi Arabian stock exchange, is on the verge of announcing the first ever joint-listings of companies from other Gulf countries in a move that further illustrates the growing regional power of the market.

Khalid Al-Hussan, the exchange’s chief executive, told Arab News on the sidelines of the Financial Sector Conference in Riyadh that two companies — one from the UAE and one from Bahrain — are about to submit the necessary documentation to enable their listing in Riyadh. He declined to identify them.

“Two companies are in advanced discussions and are about to submit their files,” he said. The final decision on their listing rests with the regulator Capital Markets Authority, but Al-Hussan has made no secret of his desire to get non-Saudi companies from the Gulf Cooperation Council listed on the Riyadh market.

“We are an important regional platform and we can complement secure access to capital and the liquidity they lack in their home markets,” Al-Hussan said, adding that Tadawul was speaking to several other corporates in the region to gauge their interest.

Joint listings for other Gulf stocks would be an important step in Tadawul’s ambition to be the dominant stock market in the region. Al-Hussan is also planning Gulf-wide initiatives in other areas of securities trading, like settlement and clearing.

“Tadawul can play an important role in post-trade business, because of its size and liquidity. Running a clearing house is very expensive,” he said. Tadawul is already in talks with the Abu Dhabi Securities Exchange and Bahrain Bourse about the possibility of them using Tadawul for clearance and settlement activities.

“They are assessing whether Saudi infrastructure is right for them,” Al-Hussan said. There have been no talks yet with Dubai.

We are an important regional platform and we can complement secure access to capital and the liquidity they lack in their home markets.

Khalid Al-Hussan

News of Tadawul’s growing regional ambitions comes as the Riyadh market continues to reap benefit from the ongoing upgrades to emerging markets status and inclusion in the main indices.

The next tranche of Saudi stocks get included in the FTSE-Russell index next week, while the first tranche under the MSCI upgrade takes place at the end of next month.

“We’re up 18 percent since the beginning of the year, and I don’t think you’ll find many emerging markets performing better than that,” Al-Hussan said of the Tadawul index’s performance.

He said that an influx of foreign investors was a very important reason for the strength of Saudi markets. “It is not just my feeling, it is the facts. Foreign investment is positive every day. Cash inflows are positive and increasing each week,” Al-Hussan said.

The market is also finessing preparations for the introduction of derivatives trading, which is likely to happen in the second half of the year. Al-Hussan said that all the necessary regulations were in place to allow trading in derivatives — securities based on future values of stocks — and that it was awaiting final regulatory approval.

 

 “We are still waiting on the readiness of market traders to actually trade derivatives, and on the readiness of local investors for them. They have to be well informed,” he said.

The Nasdaq Dubai exchange in the UAE already has a platform for derivatives trading in Saudi equities, but Al-Hussan said: “It is very hard for a regional exchange to compete with the domestic one, especially if it does not have much liquidity.”

In the course of the Financial Sector Conference, tech firm Al Moammar Information Systems Company began trading on Tadawul, and marketing is well underway for the forthcoming initial public offering of Arabian Centers by the Fawaz Alhokair Group.

Tadawul also announced a number of “enhancements” to the fee structure of the bond markets, including reducing commissions and waving others, to enhance the competitiveness of debt instruments on the exchange.

FACTOID

18.5%

Rise in the Tadawul All Share Index so far this year