JEDDAH, 26 August 2007 — Saudi Arabia’s Capital Market Authority (CMA) reported yesterday that the total value of the 62 initial public offerings (IPOs) made in 2006 amounted to SR28 billion ($7.46 billion).
Dr. Abdul Rahman Al-Tuwaijeri, CMA’s chairman, said in its first annual report that the number of IPOs recorded last year was the largest since its inception in 2004.
He said the CMA approved only 40 IPOs drawing SR12 billion ($3.2 billion) from the middle of 2004 till the end of 2005.
Al-Tuwaijeri emphasized that the new rules and regulations passed by his office were instrumental in strengthening and organizing the market and attracting a large number of investors.
The new regulations including the investment fund law, registration and listing principles and share issuance law increased the market’s transparency, strengthened its stability and growth and enhanced investor’s confidence, he said.
Al-Tuwaijeri described the last two years as “an important phase of establishment and organization” when the market witnessed the passing of several regulations and introduction of new measures aimed at protecting the interests of investors and ensuring justice and transparency.
The CMA report discussed the new rules and regulations issued by the authority including the market etiquette, principles to be followed by licensed agents and the company control law as well as the major decisions adopted by the authority to strengthen the market.
During the reporting period, the CMA allowed expatriates to invest in the Kingdom’s stock market and reduced the nominal value of joint stock company shares to SR10 per share and fixed maximum commission at SR12 for transaction orders up to SR10,000.
The CMA set out regulations in order to allocate the largest number of offered shares to individual subscribers and reduce the period for returning excess money to investors after final allocation of shares. “These measures contributed to increasing the number of investors in Saudi stock market,” the CMA chief said.
The authority also took measures to facilitate subscription of shares during IPOs through the Internet, ATMs and telebanking services, thus cutting down prospects of errors and reducing dependence on printed subscription forms.
During the last two years, the CMA settled 70 percent of 2,295 complaints it had received from investors. It licensed 40 new companies in 2006 compared to eight in 2005.
The number of people who visited the authority’s website reached 100,000 monthly, bringing the total to 1.5 million in 2006 against 500,000 in 2005.
The report also explained CMA’s efforts to enlighten investors by holding awareness campaigns and conducting seminars. It also conducted a survey on the awareness level of investors and their trends. It published a large number of advertisements and pamphlets to enlighten investors. It has set up an interactive site to teach potential investors how to invest and how to make financial plans.
The report also dealt with the CMA’s efforts to modernize the market and provide it with a new generation of exchange, settlement and supervision systems. The first phase of this project was completed in the second quarter of 2007. The report also pointed out that 99.9 percent of CMA’s employees are Saudis.