Saudi Arabia tightens corporate ownership rules to boost transparency

RIYADH: Saudi Arabia’s economic diversification strategy is transforming local capital markets and driving regional growth, positioning the Gulf Cooperation Council as an emerging financial hub, according to a Moody’s report. 

The Kingdom’s ambitious Vision 2030 plan is reshaping the nation’s financial landscape, with capital markets crucial for funding large-scale investment projects and attracting global investors.

The study further stated that sovereign wealth funds will act as “catalysts for capital market development and put the region on the global investment map.” 

The expansion of Gulf capital markets is being driven by economic diversification and structural reforms. 

Vision 2030 has accelerated investment in key non-oil sectors, creating new opportunities fueling market growth. 

Moody’s analysis aligns with recent reports that highlight the significant growth of Saudi Arabia’s capital market. 

Over the past five years, the Kingdom raised $274 billion, with $130 billion from US dollar-denominated issuances and $144 billion locally in Saudi riyals. 

Moreover, the Saudi Exchange experienced a 40 percent liquidity increase in 2024 compared to 2023. 

Foreign participation is considered essential for this transformation, and “debt capital markets have significant room for expansion,” the report stated. 

Regulatory reforms are expected to further boost international equity investment by easing foreign ownership rules and new offering requirements, attracting both passive and active inflows and encouraging greater private sector participation. 

These regulatory and operational enhancements have already led to the inclusion of the Saudi equity market in global indices, boosting liquidity and institutional investment, with further growth expected from increased initial public offerings, the study stated. 

Private credit markets are also expected to grow as investor appetite for alternative investments rises. 

Given the significant funding needs associated with economic transformation, alternative investments will gain traction. 

Moody’s believes that these include regional and global private credit funds, direct lending, and structured finance solutions. 

Private credit is also emerging as a viable alternative for small and medium-sized enterprises, making this option a viable alternative for this underserved segment, as banks have historically been cautious in lending to SMEs. 

Despite strong growth prospects, challenges remain, the report highlighted, adding: “Regulatory and legal complexities, together with a limited track record in some asset classes may impede long-term growth.” 

Additionally, the region’s dependence on hydrocarbon exports and exposure to geopolitical risks could impact market stability and investor sentiment. 

Sovereign wealth funds will continue to play a major role in shaping regional capital markets, as they provide liquidity, enhance market depth, and anchor foreign investor confidence. 

“Saudi Arabia’s Public Investment Fund has been central to the Kingdom’s economic diversification strategy by directing investments into key non-oil sectors and planning major IPOs, raising the profile of the Saudi stock market,” the report added. 

RIYADH: Trade between Jordan and Saudi Arabia has surged, reaching $29.7 billion from 2018 to 2024, according to the Amman Chamber of Commerce.

In 2018, the total trade volume stood at 2.89 billion Jordanian dinars ($4.07 billion). By the first 11 months of 2024, trade grew to 3.74 billion dinars.

Jordan’s imports have fluctuated over the years, while exports nearly doubled, rising from 503.7 million dinars in 2018 to a record 1.04 billion dinars in 2024. In 2019, imports totaled 2.27 billion dinars, with exports climbing to 548.9 million dinars.

The global pandemic caused a dip in 2020, with imports dropping to 1.52 billion dinars, while exports remained relatively stable at 576.2 million dinars.

The rebound began in 2021, with imports rising to 2.28 billion dinars and exports growing to 733.4 million dinars.

In 2022, trade reached its peak, with imports hitting 2.93 billion dinars and exports increasing to 840.3 million dinars. In 2023, imports fell slightly to 2.58 billion dinars, but exports grew to 983.7 million dinars.

By the end of November 2024, imports from Saudi Arabia stood at 2.7 billion dinars, while exports hit the highest level in seven years at 1.04 billion dinars.

Between 2018 and 2024, Jordan’s cumulative trade with Saudi Arabia totaled 21.1 billion dinars, comprising 17.6 billion dinars in imports and 5.5 billion dinars in exports.

Saudi Arabia primarily exports mineral products, such as petroleum oils, as well as chemicals and food products, including sugar. Jordan’s key exports include pharmaceutical products, live animals (notably sheep), fresh and processed fruits and vegetables, and iron-based goods.

Saudi Arabia is a crucial energy supplier to Jordan, which relies on imports to meet its domestic needs. In turn, Saudi Arabia imports essential goods from Jordan, including pharmaceuticals, agricultural products, and live animals.

According to the International Trade Centre’s Export Potential Map, Jordan has an untapped export potential to Saudi Arabia of 43 percent, with live sheep leading the way, representing a $206 million export gap.

Other potential exports include bromides and bromine oxides ($39 million) and antibiotic pharmaceuticals ($8 million), signaling opportunities for Jordan to expand its pharmaceutical exports to Saudi Arabia.

In an effort to strengthen bilateral ties, the Amman Chamber of Commerce will host the Jordan-Saudi Business Forum on Feb. 24 in collaboration with the Federation of Saudi Chambers and the Saudi Export Development Authority. The forum aims to foster new business partnerships and explore opportunities across various sectors.

Additionally, the Saudi-Jordanian Business Council will meet on the same day to further enhance trade and investment relations.

The Jordanian side of the council is led by Khalil Tawfiq, president of the Amman Chamber of Commerce, while the Saudi side is chaired by Hamdan Al-Samreen, president of the Al-Jouf Chamber of Commerce. Government investment ministries will also participate in the discussions.