Tadawul reveals raft of reforms as it prepares for cross listings

RIYADH: Saudi Arabia is expected to finalize rules to allow cross listings on the Tadawul stock exchange in the second quarter of this year in a move that could spur more trading on the region’s biggest stock market.
The Tadawul also announced on Thursday a number of changes to its parallel market, called “Nomu” which aims to support small businesses.
The reforms, to be rolled out in phases between April and September, include provisions to allow for direct listings on Nomu without an IPO (initial public offering).
Companies will also be allowed to report on a semi-annual basis instead of quarterly while the market streamlines the process for issuers to transition from the parallel market to the main market.
Plans are also in place to allow for the listing of closed-end real estate investment trusts (REITs).
“These initiatives are part of our ongoing strategic plans to further develop Nomu,” said Khalid Al-Hussan, the CEO of Tadawul.
“We are constantly working on making Nomu a more flexible attractive platform for both investors and potential companies,” he said.
These latest reforms coincide with the Tadawul joining the FTSE Russell and S&P international indices as an emerging market as well as the MSCI Emerging Markets Index, all of which are set to boost liquidity on the market.
Plans to allow cross listings on the Tadawul of companies from other Gulf states could also spur trading.
“There is a good interest from companies in the GCC countries to list on the Saudi market,” he said. “We are also opening the doors for the SMEs in the GCC to access the parallel market.”
Efforts are also being made to develop research for Nomu-listed companies so that investors are better informed.
The Tadawul expects passive fund inflows of $15 to $20 billion this year, Al-Hussan told Reuters in an interview on Thursday.

Tadawul reveals raft of reforms as it prepares for cross listings