Saudi market regulator approves public offering of two funds

Blominvest Saudi Arabia and SNB Capital both plan to list funds on kingdom's stock exchanges

The Riyadh skyline. Saudi Arabia’s Capital Markets Authority approved a request for the public offering of Blominvest Saudi Arabia’s murabaha fund. Reuters

Saudi Arabia’s Capital Markets Authority approved plans to list two funds – Blominvest Saudi Arabia's riyal-denominated murabaha fund and SNB Capital's Al Ahli-King Saud University Waqf Fund – on the kingdom's stock exchanges.

Blominvest, a subsidiary of Lebanon's Blom Bank, offers investment funds as part of a range of services that include asset and wealth management, corporate finance and advisory work.

The company did not disclose the size of the murabaha fund. Murabaha is an Islamic financing structure that allows a purchaser to pay for an asset at an agreed mark-up, but does not include interest payments.

"The CMA's approval of the fund should never be considered as a recommendation to subscribe" to the fund but merely means that the legal requirements of the Capital Markets Law have been met, the regulator said.

The CMA also approved the public offering of SNB Capital’s Al Ahli-King Saud University Waqf Fund. The company did not disclose the size of the fund.

Saudi Arabia's stock market has outperformed global bourses this year, gaining 27 per cent since the start of the year, as of Sunday's close.

In comparison, the US S&P 500 index is up by about 16 per cent while the MSCI World Index has increased by 13 per cent.

Fears about a wider spread of the Covid-19 Delta-plus strain could weigh on Gulf markets in the coming days but "the Saudi market is expected to be more resilient", said Michael Stark, a research analyst at forex brokerage Exness.

"Thanks to its solid economic base, the Tadawul might be the first market in the region to resume its climb after the recent Covid variant concerns are fully priced in and integrated by the market participants," he said.

A number of new listings are expected to come to the exchange in the second part of this year, with the CMA last week approving a request from the International Company for Water and Power Projects, better known as Acwa Power.

Acwa plans to sell 81.1 million shares, about 11.1 per cent of its share capital, through the listing.

It operates in 13 countries across the Middle East, Africa and South-East Asia and has a $66 billion portfolio with 64 assets that produce 42 gigawatts of power and 6.4 million cubic metres a day of desalinated water.

The kingdom’s sovereign wealth fund, the Public Investment Fund, holds a 50 per cent stake, making it the biggest shareholder in the company.

Acwa has eight other stakeholders, including the Saudi Public Pension Agency and the World Bank's International Finance Corporation.

Arabian Internet and Communications Services company, or STC Solutions, also plans to sell 24 million shares representing 20 per cent of its share capital through an initial public offering, according to the CMA.

The Saudi Tadawul Group, which operates the kingdom's stock market, is also expected to conduct its own IPO this year, which would make it the third publicly listed exchange in the Gulf after the Dubai Financial Market and Boursa Kuwait.