Improvements aimed to support the growth and development of SMES.
The Saudi Stock Exchange, also known as Tadawul, on Wednesday announced a series of structural changes to Nomu, the parallel market supporting small and medium-sized companies (SMES). The changes are aimed at supporting the growth, development and sustainability of the market, increasing the number of listed companies and enhancing liquidity, a statement suggests.
Nomu is a parallel equity market with lighter listing requirements that serve as an alternative platform for companies to go public, and the investment in this market is restricted to Qualified Investors. The program was launched two years ago to become a key part of the diversification of the Saudi economy.
The development plans are to take actions in two parts within the first two quarters of 2019 and include provisions to allow direct listings on Nomu without an initial public offering (IPO), requirements for issuers to report financial earnings on a semi-annual basis instead of quarterly based reporting and streamlining the process for issuers to transition from Nomu to the main market. The second phase will include listing close-ended funds and REITs on Nomu, introducing volatility guards and independent research.
Khalid Al Hussan, CEO of Tadawul, said: “These initiatives are part of our ongoing strategic plans to further develop Nomu. We are constantly working on making Nomu a more flexible attractive platform for both investors and potential companies. Throughout the past two years, we have been carefully analyzing the market and taking into consideration the needs of market participants.
The changes also come hand in hand with the Saudi market upcoming inclusion in FTSE Russell and S&P international indices, as well as Kingdom 2030 Vision in developing the financial sector. The improvements will build a modern market which will be open wide to the new world and to increase funding and investment opportunities of the Saudi SMES.
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