Capital Markets

Subdued oil prices deflated investor sentiment across the GCC throughout most of 2017. However, mid-2017 brought some encouraging developments: news of a possible MSCI reclassification resulted in a spike in the main index of the Saudi Stock Exchange (Tadawul) in the summer of 2017. In 2016 the government launched the National Transformation Programme 2020, with the goal of turning the economy around and taking steps towards achieving the objectives laid out in Vision 2030, the long-term national plan to become a modern, diversified economy. While the onset of the NTP improved investor sentiment by clarifying the government’s long-term objectives, in September 2017 the NTP was revised, postponing some deadlines and removing other elements from the plan altogether. These changes make future progress towards Vision 2030 less certain, which could have negative effects on investor sentiment. While this may discourage some investment in the short term, an ongoing process of reform carried out by the exchange authorities promises to attract more interest in new market instruments.

This chapter contains interviews with Mohammed El Kuwaiz, Chairman, Capital Markets Authority; Sarah Al Suhaimi, Chair, Saudi Stock Exchange; and Majed Najm, CEO, HSBC Saudi Arabia.