How much does a Big Mac cost in Arab countries? 

How much does a Big Mac cost in Arab countries? 
The Economist invented the index to offer a lighthearted measure of currency valuation by applying the economic theory of PPP. Shutterstock
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Updated 01 October 2024
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How much does a Big Mac cost in Arab countries? 

How much does a Big Mac cost in Arab countries? 
  • Big Mac Index reveals currency undervaluation across the region 
  • Cheapest Big Mac was in Egypt, priced at $2.47, and most expensive was in Lebanon, costing $5.13

CAIRO: A Big Mac burger costs less on average in Arab countries compared to the US, indicating currency undervaluation in the region.

The latest Big Mac Index reveals that currencies in Saudi Arabia, Egypt, Bahrain, UAE, Lebanon, Jordan, Qatar, Oman, and Kuwait are undervalued when compared to the US dollar, indicating disparities in purchasing power parity across these nations. 

The cheapest Big Mac was in Egypt, priced at 120 Egyptian pounds ($2.47), reflecting a 56.6 percent undervaluation of the Egyptian pound against the US dollar. 

Conversely, the most expensive Big Mac was in Lebanon, costing 460,000 Lebanese pounds ($5.13), indicating a 9.7 percent undervaluation of the Lebanese pound. 

Invented by The Economist in 1986, the index offers a lighthearted measure of currency valuation by applying the economic theory of PPP. This theory suggests that exchange rates should adjust so that a basket of goods and services, including a Big Mac burger, costs the same across different countries when measured in a common currency. 

Most other Arab currencies, including the Kuwaiti dinar, Bahraini dinar, and Omani rial, also showed notable undervaluation in July, highlighting ongoing regional economic imbalances.

Here’s how each country fares in currency valuation and purchasing power:

Saudi Arabia  

The Big Mac Index for July reveals that the Saudi riyal is 11 percent undervalued against the US dollar, with a Big Mac costing SR19 ($5.06) compared to $5.69 in the US. 

The implied exchange rate of SR3.34 per dollar contrasts with the actual market rate of SR3.75, underscoring the currency’s undervaluation. However, after adjusting for gross domestic product per capita, the analysis shows that a Big Mac is 11 percent cheaper in Saudi Arabia, while it should be 12.6 percent cheaper. This suggests the riyal is actually 1.8 percent overvalued when considering local purchasing power. 

This represents a slight shift from July 2023, when the riyal was 9.2 percent undervalued based on the Big Mac Index.  

At that time, a Big Mac in Saudi Arabia also cost SR19, compared to $5.58 in the US, resulting in an implied exchange rate of 3.41. Adjusting for GDP per capita, the 2023 analysis indicated that a Big Mac was 9.2 percent cheaper in Saudi Arabia, but it should have been 11 percent cheaper, suggesting the riyal was 2 percent overvalued. 

This year’s Big Mac Index highlights significant undervaluation across several Arab currencies, continuing a trend observed in the previous year and underscoring ongoing disparities in purchasing power within the region. 

UAE  

In the UAE, a Big Mac cost 18 dirhams in July, implying an exchange rate of 3.16 UAE dirhams per US dollar. However, the actual exchange rate was 3.67 dirhams per dollar, indicating that the dirham was 13.9 percent undervalued. 

When adjusted for GDP per capita, the dirham was still undervalued by 8.4 percent, as a Big Mac cost 11 percent less in the UAE compared to the US. 

This represents a slight increase from July 2023, when the dirham was 12.2 percent undervalued with an implied exchange rate of 3.23 dirhams per dollar. At that time, the GDP-adjusted analysis showed the dirham was 7.7 percent undervalued, with the Big Mac priced 12.2 percent less in the UAE. 

Bahrain  

In Bahrain, a Big Mac was priced at 1.70 dinars in July, implying an exchange rate of 0.30 dinars per US dollar. The actual exchange rate was 0.38 dinars per dollar, indicating a 20.8 percent undervaluation of the Bahraini dinar. 

When adjusted for GDP per capita, the dinar remained undervalued by 9 percent, with the Big Mac costing 20.8 percent less than in the US. 

This marks a slight increase in undervaluation from July 2023, when the dinar was 19.2 percent undervalued with an implied exchange rate of 0.30 dinars per dollar. At that time, the GDP-adjusted undervaluation was 8.4 percent, with the Big Mac priced 19.2 percent less than in the US. 

Kuwait   

In Kuwait, a Big Mac was priced at 1.40 dinars in July, implying an exchange rate of 0.25 dinars per US dollar. The actual exchange rate was 0.31 dinars per dollar, suggesting the Kuwaiti dinar was 19.5 percent undervalued. 

When adjusted for GDP per capita, the dinar was 9.1 percent undervalued, with the Big Mac costing 19.5 percent less than in the US. 

In comparison, July 2023 data indicated the dinar was 18.3 percent undervalued, with an implied exchange rate of 0.25 dinars per dollar. The GDP-adjusted analysis at that time showed the dinar was 10.4 percent undervalued, with the Big Mac priced 18.3 percent less in Kuwait. 

Oman   

Oman displayed the highest level of undervaluation in July, with a Big Mac priced at 1.53 rials, implying an exchange rate of 0.27 rials per US dollar. The actual exchange rate was 0.39 rials per dollar, indicating a 30.2 percent undervaluation of the Omani rial. 

When adjusted for GDP per capita, the rial was 18.6 percent undervalued, with the Big Mac costing 30.2 percent less in Oman compared to the US. 

This represents a slight improvement from July 2023, when the rial was 33.9 percent undervalued, with an implied exchange rate of 0.25 rials per dollar. The GDP-adjusted analysis from that year showed the rial was 25.1 percent undervalued, with the Big Mac priced 33.9 percent less in Oman. 

Egypt  

In Egypt, a Big Mac was priced at 120 Egyptian pounds in July, implying an exchange rate of 21.09 pounds per US dollar. The actual exchange rate was 48.60 pounds per dollar, indicating a 56.6 percent undervaluation of the Egyptian pound. 

When adjusted for GDP per capita, the pound was 44.7 percent undervalued, with the Big Mac costing 56.6 percent less in Egypt compared to the US. 

This marks a deterioration from July 2023, when the pound was 53.1 percent undervalued, with an implied exchange rate of 14.52 pounds per dollar. At that time, the GDP-adjusted analysis showed the pound was 41.1 percent undervalued, with the Big Mac priced 53.1 percent less in Egypt. 

Qatar  

In July, the Qatari riyal displayed notable undervaluation, with a Big Mac priced at 14 riyals, implying an exchange rate of 2.46 riyals per US dollar. The actual rate was 3.64 riyals per dollar, indicating a 32.4 percent undervaluation of the riyal. 

After adjusting for GDP per capita, the riyal was 38.4 percent undervalued, with the Big Mac costing 32.4 percent less in Qatar compared to the US. 

This reflects a slight increase from July 2023, when the riyal was 31.1 percent undervalued, with an implied exchange rate of 2.51 riyals per dollar. The GDP-adjusted analysis from that year suggested the riyal was 38 percent undervalued, with the Big Mac priced 31.1 percent less in Qatar. 

Jordan  

In Jordan, the Big Mac was priced at 2.50 dinars in July, implying an exchange rate of 0.44 dinars per US dollar compared to the actual rate of 0.71 dinars. This indicates the Jordanian dinar was 38 percent undervalued. 

After adjusting for GDP, the dinar was 21.8 percent undervalued, with the Big Mac costing 38 percent less in Jordan than in the US. 

This marks a slight increase in undervaluation from July 2023, when the dinar was 36.8 percent undervalued, with an implied exchange rate of 0.45 dinars per dollar. The GDP-adjusted analysis at that time showed the dinar was 21.2 percent undervalued, with the Big Mac priced 36.8 percent less in Jordan. 

Lebanon  

In July, a Big Mac in Lebanon was priced at 460,000 Lebanese pounds, implying an exchange rate of 80,843.59 pounds per US dollar compared to the actual rate of 89,550.00 pounds. This indicates the Lebanese pound was 9.7 percent undervalued. 

In July 2023, the Big Mac cost 430,000 Lebanese pounds, with an implied exchange rate of 77,060.93 pounds per dollar. The actual rate at that time was 85,500 pounds, suggesting the pound was 9.9 percent undervalued. 

These figures highlight a persistent undervaluation of the Lebanese pound and other Arab currencies, with consistent disparities between implied and actual exchange rates. Despite slight year-over-year variations, the trend of undervaluation remains stable, reflecting ongoing challenges in currency valuation in the region.


Experts highlight importance of data in capital markets at Saudi forum

Experts highlight importance of data in capital markets at Saudi forum
Updated 18 February 2025
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Experts highlight importance of data in capital markets at Saudi forum

Experts highlight importance of data in capital markets at Saudi forum
  • Industry specialists said that real-time data availability is equally crucial for other participants

RIYADH: Accessing and interpreting data effectively is crucial for investors’ success in capital markets, as it enables them to make informed and timely decisions, according to experts. 

During a panel discussion at the Capital Markets Forum in Riyadh on Feb. 18, industry specialists said that real-time data availability is equally crucial for other participants, such as brokers, asset managers, and external institutions.

“What I believe is that data is the new alpha. So, those who master it will not only participate or win in the market, but they will define the market,” said Mehdi Miri, CEO of DirectFN. 

He added: “For investors, data is really about making smart and fast decisions. What investors need to see today is real-time AI-powered data that will help them look into insights and foresight so that they can see market opportunities before the market moves.” 

Miri further said that brokers and banks are using advanced analytics to build their trading and hedging strategies, ultimately improving their execution process. 

Yazeed Al-Domaiji, CEO of Wamid, a subsidiary of Saudi Tadawul Group, highlighted the importance of accessing data while maintaining rules and regulations. 

“Capital markets are driven by data. Data is there from more than 100 years ago. Everybody in capital markets is looking for data, using data to make decisions. As a capital market institution, it is necessary to find the balance of how we can innovate while maintaining the regulations,” said Al-Domaiji. 

He added that Wamid is aiming to play a major role in enabling the capital market industry in the Kingdom as it has announced a recent partnership with Google, with Saudi Arabia having strategic plans to adopt data and artificial intelligence in the sector.

Al-Domaiji said that Wamid is encouraging innovation in the capital market by focusing on two pillars, including data solutions and infrastructure technology. 

“In data solutions, we announced our partnership to launch our project for the data terminal. What we are planning to do is to offer a set of data that suits the demand of the market. We are focussing on satisfying the issuers, the capital market institutions, and the investors through a series of data with easier accessibility and good quality,” said Al-Domaiji. 

He added: “On the infrastructure side, we are helping the capital market to increase the access of institutional investors, especially for the HFTs (high-frequency trading). So, today, in Saudi Arabia, HFT trading is around 25 percent of the daily average trading.” 

Miri further said that data has become a strategic asset over time, and it is not just a global trend but a local and regional reality. 

“Data is a strategic asset. When we talk about monetization, data is a business in itself. This is a Spotify moment for data, where we are bringing and converging raw data into an on-demand revenue-generating machine,” added Miri. 

He said the capital market currently demands data that are not just numbers but enriched pieces of information, which should give foresight on what to do next. 

Miri also underscored the vitality of personalizing the data and integrating them into one single platform for better efficiency and quick decision-making. 

Regarding the future outlook of the importance of data in capital markets, Miri said: “Further down the road, if you have the data and if you have the liquidity, this could be the new asset class. A few decades ago, no one was thinking about carbon trading. In the future, we will be talking about data trading. Obviously, we have to balance it with data protection and regulation.” 

Underscoring the importance of datasets, Al-Domaiji added that data will become the “new currency for the capital market” in the future. 

Doug Peterson, special adviser and member of the board of directors at S&P Global, stressed the importance of data privacy and said: “The first question you have to ask from a governance standpoint is how I am going to protect my data. Do you want your data to be the one that is used in a model that is being built? Once it is there, that model is going to be using your data forever, and you are going to get paid for it.” 

He added: “I am really encouraged by what is happening in the Saudi market. We are very pleased at S&P Global to start building the local presence, because we think this is one of the most important markets in the future.” 

Katharine Furber, global head of emerging markets trading product at Bloomberg LP, said that fixed income space is seeing huge potential in the usage of data. 

“In the fixed income space, of course, it is the sell side indication, which indicates the desire to buy or sell a bond. But also trading data, and by trading data, I do not just mean what did they trade at what price. They want to build a rich story around the trade to learn as much as possible, which includes how many counterparties they asked on the trade; whether or not those counterparties responded to the trade request,” said Furber. 


ADNOC Drilling eyes $1bn in investments, Gulf expansion plans

ADNOC Drilling eyes $1bn in investments, Gulf expansion plans
Updated 18 February 2025
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ADNOC Drilling eyes $1bn in investments, Gulf expansion plans

ADNOC Drilling eyes $1bn in investments, Gulf expansion plans

RIYADH: UAE’s ADNOC Drilling is projecting significant growth, expecting over $1 billion in investments for 2025. The company also has plans to expand its operations into Oman and Kuwait, an official revealed.

In an interview with Arab News at the Capital Markets Forum, Youssef Salem, the company’s chief financial officer, discussed the expansion strategy, emphasizing the confidence ADNOC Drilling has in the long-term, robust plans of operating companies in these countries.

“For example, Kuwait Oil Co. is going to 4 million barrels of production capacity of oil per day, also launching for the first time their offshore operations. Similarly with Oman, a lot of tenders for new rigs to upgrade their drilling field,” he explained.

Salem shared that the firm’s expansion into these Gulf nations, along with its existing operations in Jordan, is based on establishing strong relationships with local operators. ADNOC Drilling has already pre-qualified with these entities and is focusing on organic growth through partnerships and joint ventures with established regional companies.

Regarding the financial impact of the investments, Salem noted that Kuwait is currently a large market with plans to expand to 200 rigs, while Oman is also growing its market to 100 rigs. “So, these two markets combined are almost three times the size of the UAE rig market, and hence, we see it as a very substantial opportunity,” he added.

Salem pointed out the ongoing shift in ADNOC Drilling’s revenue sources. “Today, if you look in general, the vast majority of our revenues come from the UAE. That is something that is evolving. For example, on the Enersol side, which is our global investment, we expect by next year to have around 7 percent of our net income to come from these global operations.”

The CFO elaborated on the company’s anticipated growth in 2025, with expectations of the onshore segment potentially crossing $2 billion, the offshore segment reaching over $1.4 billion, and oil field services surpassing $1.2 billion—an approximate 50 percent year-on-year growth.

“So, in 2025, we are expecting the onshore to potentially cross $2 billion, the offshore to cross $1.4 billion, and the oil field services to cross $1.2 billion, another almost 50 percent year-on-year growth,” Salem said.

He also revealed that the company plans to invest more than $1 billion in 2025.

“Out of that, $350 million to $550 million will be in additional rigs and oil field service equipment inside the UAE on our roadmap to reach 151 rigs by 2028,” he said.

Additionally, ADNOC Drilling is allocating $700 million to Enersol, its joint venture with Alpha Dubai, which focuses on investing in global energy technology companies, especially those involved in artificial intelligence.

Salem also highlighted the company’s recent acquisitions, noting that ADNOC Drilling completed four acquisitions worth $800 million in the previous year and plans further acquisitions totaling $700 million in 2025.

Discussing the company’s 2024 results, which reached a record revenue of $4 billion, Salem stated: “The onshore segment generated $1.9 billion of revenues from 95 land rigs, which is the largest drilling feed on the onshore side in the Middle East and North Africa. Similarly, the offshore segment generated $1.3 billion of revenue from 47 offshore rigs. Again, the largest, and then the oil field services, which is our fastest-growing segment, growing more than 100 percent year on year.” He also added that the oil field services segment generated $100 million in the fourth quarter and expects further growth in each segment in the upcoming year.

Regarding the forum’s agenda, Salem mentioned: “Tomorrow and the day after, we have two full days of investor meetings. Saudi investors obviously are a very key part of our shareholder register, but also, you have a lot of global investors who are flying into the forum to attend.”

He emphasized that the forum presents a valuable opportunity to engage with global investors.

Salem also spoke about ADNOC Drilling’s stock, saying it is the most covered in the UAE, with 18 analysts tracking it, and holds the highest number of buy recommendations in the Middle East, with 15 advisers endorsing it.

He acknowledged the increasing significance of Saudi Arabia’s financial sector, highlighting that the Kingdom hosts leading banks and noted that Tadawul is recognized for its liquidity and market activity, supported by a robust ecosystem of market makers, brokers, analysts, and investors.

“Similarly, on the Abu Dhabi exchange side in the UAE, one of the fastest growing exchanges across the trillion dollars of market capitalization between the Abu Dhabi exchange and the Dubai financial market,” Salem said, describing the event as the “biggest capital market in the world,” a collaborative gathering where regional exchanges unite.

On ADNOC Drilling’s operations in Saudi Arabia, Salem expressed the company’s deep commitment to its operations in the Kingdom. He explained that ADNOC Drilling operates multiple subsidiaries in close collaboration with Saudi Aramco, such as EV, a subsidiary from Enersol offering smart cameras for 3D visualization beneath wells. He also mentioned NTS, a manufacturing business with a significant facility in Dammam, employing over 100 people to manufacture drilling and service equipment for companies like Schlumberger, Halliburton, and Baker Hughes.

“For us, Saudi Arabia continues to be very strategic for our actual underlying operation, and we continue to find ways to build even deeper relationships,” Salem affirmed.

Regarding a potential dual listing on the Saudi Exchange, Salem shared that the company’s current focus is primarily on the Abu Dhabi Exchange, where they already enjoy significant liquidity, with over $20 million traded daily.

“We have the benefit of having a very liquid stock trading more than $20 million a day. Saudi investors are able to invest on the Abu Dhabi Exchange. We have a lot of the major Saudi sovereign wealth funds, pension funds, asset managers able to invest from here,” he said.

He added: “We do not see any technical limitation to their ability to invest, and we think we can continue to grow the Saudi investor base even more in ADNOC Drilling on the Abu Dhabi exchange.”


Derayah Financial surpasses market growth in Saudi brokerage, asset management, CEO says 

Derayah Financial surpasses market growth in Saudi brokerage, asset management, CEO says 
Updated 18 February 2025
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Derayah Financial surpasses market growth in Saudi brokerage, asset management, CEO says 

Derayah Financial surpasses market growth in Saudi brokerage, asset management, CEO says 

RIYADH: Saudi investment firm Derayah Financial saw its assets under management soar to SR17 billion ($4.53 billion) in 2024 as it outpaced growth across the sector in the Kingdom, according to its CEO.

Speaking to Arab News at the Capital Markets Forum 2025, Mohammad Al-Shammasi revealed that this rise to a 70 percent year-on-year growth, ranking the company among the top independent firms in Saudi brokerage revenues, with the third-largest market share. 

Saudi Arabia’s asset management industry was set for growth in the second half of 2024 and into 2025, with AUM increasing 13.5 percent year over year to exceed $250 billion by mid-2024, according to a Fitch Ratings report released in October.

The Kingdom has the largest asset management industry in the Gulf Cooperation Council, the fifth-largest in the Organisation of Islamic Cooperation, and the second-largest public Islamic funds market globally. 

“The overall size of the market is actually growing at a very decent growth rate. So, if you look at retail brokerage or digital brokerage, it is historically growing at a 9 percent CAGR year after year,” he said, adding: “On the asset management side, that has been growing at around 14 percent year after year.” 

Oversubscribed IPO 

Al-Shammasi also discussed Derayah’s recent initial public offering, which was 162 times oversubscribed, underscoring the firm’s strong market position. “This is a great testament to the company’s performance over the past few years,” he said. 

Founded 17 years ago as a digital challenger in capital markets, Derayah has grown into Saudi Arabia’s third-largest brokerage on of the the largest independent brokers in the region. 

The IPO allows shareholders to sell 20 percent of the company’s shares in a secondary transaction, with 90 percent allocated to corporates and institutions and 10 percent to retail investors. 

“We think this will give us huge credibility in the market,” Al-Shammasi said, adding that the transaction could also pave the way for more fintech companies to list on the Saudi stock exchange. 

The CEO emphasized the strong demand for Derayah’s IPO from investors across Asia, Europe, and the US. “We have seen investors from all over the world submitting bids for our IPO,” he noted. 

Al-Shammasi further assured that Derayah is well-funded for the near future, with a debt-free balance sheet and a track record of generous dividend distributions. “The company does not really need any capital in the near term to continue its strategy and growth plans,” he said. 

“We have a perfect environment to raise money here in the Kingdom, and I’m more than happy to tap the market if we need it,” Al-Shammasi added. 

The CEO also revealed that Derayah has partnered with Alpaca, a significant player in international brokerage, to cater to the growing local fintech sector. The partnership aims to provide fintechs in Saudi Arabia with a localized version of Alpaca’s services while facilitating international investors’ access to the Saudi market. 

“Alpaca operates a lot of brokerage houses, and we believe this partnership will pave the way for international investors to come and trade in the local market,” he explained. 

The Capital Markets Forum 2025, hosted by Saudi Tadawul Group, aims to bring together policymakers, business leaders, and industry experts to discuss trends shaping the Kingdom’s capital markets and position Saudi Arabia as a key player in the global financial ecosystem. 


Muqassa partners with FIS to enhance trade automation and expand clearing services 

Muqassa partners with FIS to enhance trade automation and expand clearing services 
Updated 18 February 2025
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Muqassa partners with FIS to enhance trade automation and expand clearing services 

Muqassa partners with FIS to enhance trade automation and expand clearing services 

RIYADH: Saudi clearinghouse Muqassa has announced a partnership with Fidelity Information Services Global to enhance trade automation for market participants. 

In an interview with Arab News during the Capital Markets Forum in Riyadh, Wael Al-Hazzani, Muqassa’s CEO, stated that the collaboration marks a significant step in expanding the firm’s services and improving operational efficiency within the Kingdom’s financial markets. 

“Today we announced our collaboration with FIS, one of the biggest technology providers, to facilitate automation for market participants,” said Al-Hazzani, adding: “This will be part of our solution, hopefully in the second half of this year.” 

The CEO emphasized that while FIS is the first provider, Muqassa intends to partner with additional technology firms. 

“FIS is a big player in this field, and international market participants use it heavily. We are complementing our offering to reach clients familiar with FIS, but this won’t be the last partnership — we will announce others soon,” he said.

 Muqassa, which plays a central role in clearing exchange-traded products and providing risk management, is also expanding its services to the over-the-counter market. 

“Currently, we clear repo transactions traded OTC (over-the-counter), and next in the pipeline are OTC interest rate derivatives,” Al-Hazzani said, adding: “We aim to launch this service in 2025, pending regulatory alignment and technology testing.” 

In addition to enhancing clearing services, Muqassa is advancing its role in the Kingdom’s fixed-income market. The company has increased the number of government sukuk eligible as collateral for clearing members. 

“Previously, only cash was accepted as collateral. Now, all government sukuk can be included in the collateral basket,” Al-Hazzani said.

“This provides relief to clearing members, allowing them to use part of their balance sheet sitting in sukuk instead of cash,” he continued.

Currently, up to 20 percent of a clearing member’s collateral pool can consist of government sukuk, but Muqassa plans to expand this as market liquidity improves. “As the market matures, we are interested in increasing the weight of acceptable sukuk for collateral,” Al-Hazzan added. 

Looking ahead, Muqassa is prepared to accept a broader range of securities as collateral, provided they meet liquidity requirements. 

“By rules and by technology, we are ready to accept any type of security as collateral,” Al-Hazzani said, going on to say: “The key prerequisite is liquidity— there must always be a buyer in the market in case liquidation is needed. As we grow, we will gradually expand the eligible basket of collateral to include equities, bonds, and stocks.” 

While Muqassa’s immediate focus remains on the Saudi market, it has long-term plans to expand regionally. 

“We are still a young company with many initiatives ahead, but our next step will be to explore markets in the GCC and beyond,” Al-Hazzani said.

Muqassa was established as part of Saudi Arabia’s Financial Sector Development Program to enhance market efficiency and attract global investors.

By centralizing counterparty risk management and aligning with global clearing standards, Muqassa aims to support the continued evolution of the Saudi financial market.


Saudi Exchange eyes 50 IPOs as market maturity grows, says top official 

Saudi Exchange eyes 50 IPOs as market maturity grows, says top official 
Updated 18 February 2025
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Saudi Exchange eyes 50 IPOs as market maturity grows, says top official 

Saudi Exchange eyes 50 IPOs as market maturity grows, says top official 

RIYADH: Saudi Arabia’s stock exchange has a robust pipeline of 50 initial public offerings, a sign of growing confidence in the Kingdom’s capital market, according to a top official. 

Lee Hodgkinson, group chief strategy officer at Saudi Tadawul Group, said the increasing number of private sector listings underscores the maturity of the country’s financial ecosystem. 

The assessment aligns with professional services firm EY, which expects Saudi Arabia to lead IPO activity in the Middle East and North Africa this year. 

“There are more than 50 prospective IPOs registered at the CMA (Capital Market Authority). That is a very healthy pipeline. I’m sure a pipeline that is envied by many of our exchange peers around the world,” Hodgkinson told Arab News on the sidelines of the Capital Markets Forum in Riyadh. 

“The conventional wisdom is almost all of that pipeline must be government-related companies. Actually no, it is the private entities that are coming to market, which I think is a sign of real maturity of the capital markets in the Kingdom,” he added. 

Capital market growth

Saudi Arabia’s capital market is on a steady growth trajectory, with strong momentum expected through 2030, Hodgkinson said. 

“The economic drive in the Kingdom, it’s really quite astonishing, particularly relevant to the rest of the world. So, it really is boom time, and it long might continue,” Hodgkinson noted. 

The executive highlighted the Kingdom’s debt market as a future area of success, driven by ongoing regulatory reforms. 

“If you look at CMA strategy, if you look at the financial services development plan and the whole ecosystem drive, I feel very confident that we’ll see a very powerful debt market really emerging in Saudi Arabia in the coming years,” he said. 

Tadawul Group is working toward establishing Saudi Arabia as a global financial hub bridging the East and the West. As part of this strategy, the exchange is expanding its investor base, particularly among qualified financial investors. 

“We’re looking to internationalize, institutionalize and electronify the business,” he said, adding that three years ago, around 8 to 9 percent of institutional electronic flow came from overseas, which he described as “not a particularly large number of QFIs.” 

Hodgkinson pointed out that today, that volume accounts for 25 percent of the market and noted that they now have over 4,000 QFIs. “The growth of international investors and eyeballs on the Saudi market has exploded,” he added. 

Commodities market expansion

Saudi Tadawul Group is also pushing into the commodities sector, particularly through its investment in the Gulf Mercantile Exchange, formerly the Dubai Mercantile Exchange. 

“The contracts at the moment are about Omani crude oil — it’s the third-largest physically delivered oil contract in the world, mainly attracting clients east of Suez, China and India. We would be driving growth in those products with our partners,” Hodgkinson said. 

Tadawul is also looking to expand into metals, mining, and agriculture — key industries in Saudi Arabia’s economic transformation under Vision 2030. 

“Real economy actors have a lot of risks — production risks, pricing risks, marketing risks. Commodity hedging to us can be very valuable,” Hodgkinson noted. 

He stressed the need for regional benchmarks in commodities pricing, particularly for metals and mining. 

“Saudi Arabia is becoming a very important player in the metals world. I think 20 percent of steel is being imported into Saudi Arabia for construction. And the issue for me is, why should those products be priced overseas?” 

“The South-South connectivity from markets like Brazil, China, and India with Saudi is growing. Why shouldn’t we have products that serve those markets rather than having to price everything in London or New York?” 

Strategic acquisitions

Tadawul Group has been expanding its regional footprint, including a 32.6 percent stake acquisition in GMEX and a 49 percent stake purchase in Direct Financial Network Co. through its subsidiary Tadawul Advanced Solutions Co. 

The GMEX deal makes Saudi Arabia the only G20 nation with a dedicated commodities exchange. “It was a very, very important strategic move for us,” Hodgkinson said. 

The DirectFN acquisition, meanwhile, enhances Tadawul’s technology capabilities and expands its fintech presence in Saudi Arabia and the broader Middle East and North Africa region. 

“It gives us a highly effective and cost-effective technology development center in Sri Lanka. It builds our presence in the Saudi market in the fintech arena. It starts to give us technology and client relationships in other countries in the MENA region,” he added.