Saudi exchange ‘aims to dominate Arabian Gulf markets’

The Saudi stock exchange is already the biggest market in the Middle East by market capitalization and trading volumes. (Reuters)
Updated 08 February 2018
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Saudi exchange ‘aims to dominate Arabian Gulf markets’

ABU DHABI: The Saudi stock exchange, or Tadawul, aims to become the dominant market in the Arabian Gulf with further moves to encourage foreign investment, a leading forum was told on Thursday.
Sarah Al-Suhaimi, head of the Tadawul, told the Milken Institute MENA Summit in the UAE capital: “For this region to become significant in global terms there will have to be one main market and that is what we are working on. This thinking has already been happening. It is the will and intention of the Tadawul to grow itself and become the biggest stock exchange in the region.
“I also know that the Capital Markets Authority (CMA, the market regulator) has been working with other regulators in the Gulf Cooperation Council to have common regulations that would allow foreign companies to list in Saudi Arabia, or to have dual listings,” she said.
The Saudi stock exchange, based in Riyadh, is already the biggest market in the Middle East by market capitalization and trading volumes, but lags well behind others — notably the UAE stock markets — in the proportion of stock held by foreign investors.
Future inclusion in emerging markets (EM) indices, now being considered by the index compilers, would boost foreign ownership, currently a mere 1 percent of the total, she said.
Al-Suhaimi said that “everything is done” for EM index inclusion later this year. “We know because we have been working with the indices and with foreign investors.”
The coming initial public offering (IPO) of the national oil company Saudi Aramco, which is pledged to least part of its historic flotation in Riyadh, would also have a major effect on the Saudi market, she said.
Asked whether the Tadawul remained confident that it could “exclusively” stage the IPO, which could be worth up to $100 billion, she said: “We are ready and waiting for any decision the company might make, whether that’s for a dual listing with another exchange or a local listing. We are prepared to do whatever is decided.”
Achieving a unified stock exchange in the region would be a challenging process. Other GCC states have marketed themselves as “gateway” hubs for investors in the region and are likely to guard that position jealously.
The UAE, in particular, has two main equity markets — in Dubai and Abu Dhabi — around which the country has built a strategy of financial “clusters” to lure foreign investment.
But investors at the forum said the idea could work. “The UAE and Saudi Arabia have been cooperating on so much lately that this could be the next thing they do together. The pie will just get bigger with the transformation underway in Saudi,” said one banker, who declined to be named.
There was general agreement at the summit that the opening up of the Saudi economy to foreign investment would benefit the whole region. Miguel Azevedo, head of investment banking for the Middle East and Africa for American banking giant Citigroup, said that the investment climate had improved significantly. “But what we need are transactions. IPOs were almost nonexistent just a year ago. The Adnoc Distribution IPO has traded well and we need more like that.”
He said that the Aramco public offering would “massively increase awareness and the attraction of the region. It is the biggest transaction in the history of mankind.”


Flight rights group takes Ryanair to court over strike compensation

Updated 15 August 2018
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Flight rights group takes Ryanair to court over strike compensation

  • Ryanair had to cancel around 1 in 6 flights last week due to a walk-out by pilots in five European countries
  • The disruption affected 55,000 travelers

BERLIN: German passenger rights company Flightright is taking Ryanair to court over whether it should pay financial compensation to passengers affected by strikes at Europe’s largest low-cost carrier.
Ryanair had to cancel around 1 in 6 flights on Friday due to a walk-out by pilots in five European countries, disrupting an estimated 55,000 travelers.
The worst affected country was Germany, where 250 flights affected around 42,000 passengers.
EU rules state that passengers can claim monetary compensation of up to €400 for flights within the region for canceled or delayed flights, unless the reason is extraordinary circumstances, such as bad weather.
Strikes have generally fallen under extraordinary circumstances although a ruling by the European Court of Justice in April said that a wildcat strike by staff at German airline TUIfly following a restructuring could not be classed as extraordinary circumstances. Flightright said it believes Ryanair is therefore obliged to pay monetary compensation to customers and so has filed a complaint with a court in Frankfurt in a bid to clarify the rules around strikes.
A spokeswoman for the court said she was aware of the Flightright statement, but that she had not yet seen the complaint.
Ryanair said it fully complies with the European legislation on the matter, known as EU261.
“Under EU261 legislation, no compensation is payable when the union is acting unreasonably and totally beyond the airline’s control. If this was within our control, there would be no cancelations,” a spokesman said.
Passenger rights groups such as Flightright help passengers to claim compensation from airlines under EU261 rules but in exchange for a share of the compensation received.
Many European airlines, including Ryanair, therefore urge passengers to file claims with them directly instead.