Despite a backdrop of global volatility witnessed by global financial markets, Saudi Tadawul Group achieved steady success during 2022, as the Group developed and fostered the growth of a strong IPO pipeline through continuous enhancements. We built a diversified and resilient capital market, as evidenced by the record number of listings in 2022 and the sectors now represented across the Main Market and the Nomu – Parallel Market.
In addition, we broadened our offering, introducing new products and services, as part of our commitment to develop an advanced capital market. In doing so, we have demonstrated our capabilities to build capacity, diversify the Saudi capital market among the best performing listing markets in the world and implement best practices to drive market efficiencies.
At the start of 2022, we set out to diversify our pool of issuers and investors, while supporting the technological development of an advanced capital market. Each of the Group’s subsidiaries – the Saudi Exchange, Muqassa, Edaa and Wamid – have made significant contributions towards the achievement of these goals.
Through the Group’s integrated business model, we were able to harness the power of connection to deliver significant enhancements and create new opportunities within the Saudi capital market. This is evidenced by increased interest from local and international issuers to list on the Saudi Exchange and growing numbers of international investors participating in our market.
RECORD YEAR OF LISTINGS AND ENHANCEMENTS
In 2022, we worked to enhance the infrastructure of the Saudi capital market to host a diverse range of issuers and investors. This is evidenced by the strong IPO activity we witnessed, firmly placing the Saudi capital market among the top performing IPO markets in the world.
The Saudi Exchange welcomed the highest number of listings in the Middle East in 2022 with a record-setting 51 listings, raising a total value of SAR 40.8 Bn (USD 10.8 Bn) in capital, of the 51 listings, 19 were in the Main Market, and 32 in the Nomu – Parallel Market.
Through the Group’s integrated business model, we were able to harness the power of connection to deliver significant enhancements and create new opportunities within the Saudi capital market.
The continuous growth of the Nomu – Parallel Market is testament to the development of the SME sector in the Kingdom, as many fast-growing companies seek to sustain their businesses, enhance governance by listing on Saudi Exchange.
The Saudi capital market is the home of the region’s largest and most successful companies. In 2022, the Saudi capital market succeeded in completing its first dual listing, between the Saudi Exchange and Abu Dhabi Securities Exchange, underpinned by a strengthened regulatory environment to promote further international and dynamic transactions.
The first dual listing marks a new era of collaboration between Saudi Arabia and international exchanges. Through the year, we continued to collaborate with regional and international exchanges to lay the groundwork for future cross listings.
As a part of Saudi Tadawul Group’s efforts to develop the Saudi capital market and reinforce its position as a globally attractive investment destination, the Group successfully implemented a bundle of enhancements to develop the post trade infrastructure of the Saudi capital market. These enhancements are the largest in the history of the Saudi capital market and intend to provide investors with increased investment opportunities and access to a diverse range of financial instruments and new products.
As a result of these enhancements, our subsidiary “Muqassa” was fully activated in April 2022, which will further develop the capital market infrastructure, increase its operational efficiency, and facilitate the introduction of new products and services in the market.
In the second half of 2022, the Saudi Exchange launched its second derivatives product, single stock futures contracts (SSFs). SSFs further bolster the Saudi Exchange’s series of derivative products that will enable local and international investors to hedge and manage risk more effectively while diversifying the products available on the market, ultimately enhancing liquidity. This was followed in December with the launch of a market making framework for both the equity and derivatives markets, to deepen order book liquidity and increase price formation efficiency in the Saudi capital market.
In line with our commitment to growth and diversification, Wamid – the Saudi Tadawul Group’s innovation arm, signed a sale and purchase agreement with National Two Ventures Sole Shareholder to acquire a 51% stake in DirectFN, a leading provider of technology solutions in the financial markets.
This agreement is a significant step that demonstrates the Group’s strategy of growth and diversification, and its intention to introduce innovative products and services for investors and issuers alike.
The acquisition will play a crucial role in the development of the Saudi capital market, by allowing Wamid to provide a variety of services to clients looking to leverage the power of data in decision-making, while strengthening the groundwork for further expansion into regional markets.
RESILIENT FINANCIAL PERFORMANCE
In a year marked by volatility in global financial markets, the Group delivered resilient results, achieving a net profit after Zakat of SAR 424.6 Mn at the end of the financial year 2022.
We continued to invest in the development of our infrastructure and service offering, and strategically increased our headcount as per the Group’s plan to match our pace of growth.
Our strategic investments in infrastructure enhancements and technology resulted in a 15.8% year-on-year increase in listing fees revenue to SAR 93.2 Mn due to the increase in the number and size of listings. Revenues of the Group’s data and technology services segment increased by 7.4% year-on-year, driven primarily by the new co-location services offered by WAMID.
With the Kingdom’s promising economic forecast and solid expansion of non-oil activities, we expect to achieve more bullish expansion in 2023.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
We firmly believe that working towards sustainability create competitive advantages and business benefits in the long run. We aim to be among the world’s top capital markets through achieving world-class environmental, social and governance (ESG) performance on our internal priority measures, working with our issuers to aggressively adopt ESG management and disclosures and continuously improve performance, and encouraging our market investors to incorporate ESG into their investment decision-making, and finally accelerating the market shift towards sustainability through an expanding range of our sustainability-related product offerings.
We carried out several initiatives throughout the year to drive our ESG agenda forward, ranging from gender equality to promoting financial literacy and furthering education. We remain committed to the empowerment of women in the workforce and our progress on this front remained strong. The proportion of women employees increased to 27% in 2022, with 11% of executive positions at the Saudi Tadawul Group now held by women.
Our Graduate Development Program (GDP), now in its 11th batch, continued to build future capital market leaders by attracting, developing and retaining young, ambitious Saudi talent with unrivalled opportunities including on-the-job training and engagement with leaders across the Group.
In addition, this year, in collaboration with the Public Investment Fund (PIF), we established the Regional Voluntary Carbon Market Company. The new company provides guidance and resources to businesses as they play their part in the global transition to net zero, ensuring that carbon purchases go above and beyond meaningful reductions in carbon emissions. The Company’s launch was pivotal in facilitating the world’s largest-carbon credit auction, which was successfully held in Riyadh in October.
Saudi Tadawul Group is a key enabler of the Financial Sector Development Program under Vision 2030. Our focus will always remain on delivering sustainable value to our shareholders, while driving the long-term advancement of the Saudi capital market.
Looking ahead to 2023 and beyond, our goal will be to build on our successes and further the economic development of the Kingdom, as we work to establish Saudi Arabia as a global financial hub. Our journey is only just beginning, and I look forward to what is to come.
Finally, I would like to thank our Chairperson and Board of Directors for their support and guidance, and our employees for their dedication to excellence.
Eng. Khalid Al-Hussan
Group Chief Executive Officer,
Member of the Board of Directors