RIYADH: Three initial public offerings and various mergers and acquisitions are currently in financial services company EFG Hermes’ Saudi pipeline, a top executive told Arab News.
The sectors that the upcoming IPOs will encompass will not be “too different” from those generally brought to market by the body, said Karim Meleka, managing director of Investment Banking at EFG Hermes, an EFG Holding Co., noting that the entity is hoping to bring a “profitable, high-tech growth” company to market.
Speaking to Arab News at the Saudi Capital Market Forum in Riyadh, the executive outlined that the Kingdom’s market has seen a “much more” diversified product offering brought to the investor community compared to neighboring counterparts.
This is largely due to the private sector’s participation, saying: “That’s why I’m very happy with our pipeline. I think it’s very healthy to see that momentum continues from the private markets.”
Another driving force behind the flourishing of the Kingdom’s markets is the Capital Market Authority, Meleka said, deeming the body a “critical factor” in “what we’ve seen happen in Saudi markets.”
He said: “I think it’s that they’re very pragmatic in order to cater for investor demands. But at the same time, they’re very cognizant of local norms, local requirements and they’ve been protecting that very much.”
He added: “They’ve struck a very difficult balance that not all regulators have been able to do to that level.”
Beyond a local outlook, international market participants’ interest in the Saudi space is also primarily driven by the local investors and community being “bullish about their own country.”
This is the necessary start, the managing director outlined, noting that excitement from Saudis, whether investors, youth, or participants in the labor force, has generated a momentum that is helping attract regional and international players to the market.
Meleka said: “There is a lot of growth here, a lot of activities here. The government is definitely doing its part, but the private sector is as bullish as the government and they’re riding the wave property.”
Looking to the future, the executive noted a “hole” in global markets that Saudi Arabia is well-positioned to fill.
According to Meleka, not every issuer is able to find a “natural place” to list, adding some of the main markets have established themselves as recipients to companies that don’t have natural listings.
Many of these, he added, are emerging markets, saying: “I’d like to see Saudi kind of put itself up and say, look, we’re going to start becoming that beacon of hope, more or less for the rest of the emerging market space where they don’t have a local home to list. Please come. We’re happy to extend international investors to you. We’re happy to extend international regulations to you and put you in the context and in a venue where you can continue to grow without necessarily being Saudi.”
The next part, where the Kingdom establishes itself as a global player, is the next challenge that he “hopes to see come to fruition.”
