Saudi shows foreign investor appetite and soaring IPOs in Q1 report

Foreign investors rose to historical levels in Q1, with 9,383 new licenses
Saudi shows foreign investor appetite and soaring IPOs in Q1 report
Saudi finance

Saudi Arabia signed 101  deals during the first quarter of this year, amounting to $4 billion, a recent report by the Ministry of Investment revealed.

The deals, struck with investors interested in making use of the Kingdom’s financial and natural resources, are expected to provide more than 5,000 new job opportunities in various sectors. This should fall in line with the kingdom’s 2023 plan of lowering the overall unemployment rate from the current 6.9% to 6.0%.

The Kingdom also dominated the MENA IPO activity in Q1 2022 in both value and in volume with a total of 13 ($3.9 billion) out of 15 IPO listings ($4 billion) on both Tadawul’s main market and the Nomu parallel markets. The largest Saudi IPO during Q1 2022 was when Al Nahdi Medical Co. raised $1.38 billion in the Kingdom’s biggest IPO since Saudi Aramco’s listing in 2019. Saudi Arabia’s digital security firm Elm Information Security Company had the second-biggest IPO of the quarter, raising $819 million in proceeds.

In addition, foreign direct investment (FDI) in Saudi Arabia soared by 257.2% to reach $19.3 billion in 2021, an indicator of the opportunities provided by the Kingdom for investors, making it easier to access untapped sectors by providing “an attractive investment environment”.

Also, the Kingdom’s industrial production index (IPI) continued to rise for the eleventh consecutive month, with a 24.8% increase in March, compared to 2021, the highest growth in the past three years. The IPI is a monthly indicator measuring real output in the manufacturing, mining, electric, and gas industries. The report indicated that the increase was primarily driven by a 26.6% increase in mining activity after the Kingdom increased its oil production to more than 10 million barrels per day in March. This is in direct relation to the ongoing Russian-Ukraine aggression.

On the other hand, foreign exchange reserves kept their pace during Q1, reaching $45.7 billion in April, making Saudi Arabia the sixth-highest foreign exchange reserves among G20 economies.

The interest of foreign investors in the Kingdom rose to historical levels in the first quarter, with 9,383 new licenses. This significant increase is due to the Kingdom’s efforts to improve the investment environment and increase investor confidence after the global economic recovery in the post-COVID-19 era.

Saudi Arabia has one of the fastest recovering economies from the effects of the pandemic, with a 9.6% growth in gross domestic product during the first quarter of 2022 compared to the same quarter of 2021.

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