FTSE Russell updates Saudi Tadawul Group's investability weightings in three indices

The changes follow the bourse operator's secondary shares offering that increases group's free float

Saudi Tadawul Group has joined three FTSE Russell indices. Reuters

FTSE Russell has updated the investability weightings of Saudi Tadawul Group, the holding company that owns and operates the kingdom's stock exchange, on three of its indices.

The group now has an updated weighting in the FTSE All-World Index, the FTSE Global Mid Cap Index and the FTSE Emerging Index, it said.

“The change follows the recent secondary offering of the group’s shares by the Public Investment Fund of Saudi Arabia (PIF), which increased the group’s free float, enhancing liquidity for both local and international investors,” the Saudi Tadawul Group said.

Saudi Arabia dominated listings activity in the third quarter of this year with two IPOs on Tadawul’s main market and three on the Nomu-Parallel Market, raising $490 million in proceeds, according to London-based consultancy EY.

Tadawul is among the top 10 global stock markets and had a market capitalisation of about $2.8 trillion on December 8, 2021, when it listed. It became only the third publicly traded regional stock exchange, after the Dubai Financial Market and Boursa Kuwait.

“Higher crude oil prices, combined with favourable regional government initiatives in attracting investments to the region and Mena investors looking for futuristic investment opportunities in foreign markets will be the major drivers of M&A activity in the region going forward,” said Anil Menon, head of Mena M&A at EY.

On November 13, PIF said it sold part of its stake in the Saudi Tadawul Group as part of its efforts to unlock value and further diversify its domestic investment.

It sold 12 million shares of its shareholding in the Saudi stock exchange operator through an accelerated bookbuild offering, representing 10 per cent of the company’s share capital.

The 2.3 billion Saudi riyal ($610 million) offering is among the biggest ABO transactions to take place in the Saudi market and the GCC region, the company said at the time.

An ABO is a form of equity offering that involves the issuance of shares in a short time period, with little to no marketing. The bookbuilding is also conducted within days.

With the deal's completion, PIF holds 72 million shares, or 60 per cent, of Tadawul.