2019: The year Saudi Arabia achieved several milestones
This is my last article of 2019. Personally, I believe it was the busiest year in terms of business activities, reforms, new laws, local and international events in our recent history.
This year also witnessed perhaps the biggest event in the business world — the initial public offering (IPO) of Saudi Aramco. It would not be an exaggeration to call 2019 a year of several milestones for the Kingdom.
In 2019 we witnessed different sectors — financial, tourism, entertainment, pharmaceuticals and others — attract local and foreign capital directed to existing or new businesses. A World Bank report published earlier this year gave impressive statistics listing tangible improvements and enhancements for doing business in the country.
We at BMG Financial Group have also witnessed busy traffic of international clients discussing, negotiating and signing mandates with leading global companies who want to set up partnerships in Saudi Arabia. The last one was signing an advisory mandate with Deutsche Post DHL Group, the largest logistics and transportation company in the world, to explore partnership opportunities in Saudi Arabia. It is a vote of confidence in the country’s attractive business environment to host such vital and crucial sectors.
Several ministries and government agencies played active roles in achieving several milestones in 2019.
The market value of the Saudi stock market hit over SAR5.63 trillion (around $1.5 trillion) making it among the top 10 stock markets in the world. The Aramco offering moved Tadawul to the fourth spot globally for capital-raising this year, with five offerings attracting a combined $26.6 billion from investors, according to figures from financial data provider Dealogic. Tadawul was previously ranked 25th globally. In terms of IPOs and first-time listings, Tadawul moved to second globally after Hong Kong’s Hang Seng, surpassing both the New York Stock Exchange and Nasdaq, according to financial data provider Refinitiv.
Furthermore, 2019 witnessed an influx of international investors in local equities where foreign ownership in Tadawul almost doubled compared with the same period in 2018.
We are days from the end of 2019 and the beginning of 2020. It is still early to quantify the growth rate of Q4 in 2019, but I can tell you it has set the stage for a new era for the Saudi economy.
I believe that this momentum will continue next year and beyond. In 2020, it seems the Kingdom will witness an unprecedented growth in its gross domestic product.
Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.