The Capital Market Authority (“CMA") has released its annual report for the financial year 2022, showcasing a range of strategic objectives achieved and unprecedented records hit across various regulatory, legislative, and developmental aspects.
The report shows that the Saudi capital market ranked first among G20 markets in the shareholder rights index and stock market capitalization index, as a percentage of gross domestic product, in 2022. Furthermore, the Kingdom rose in the IMD World Competitiveness Yearbook ranking from 32nd place by the end of 2021 to 24th place by the end of 2022, advancing 8 ranks. The yearbook also cited the Kingdom moving upward in 9 out of 12 indicators relevant to the capital markets and maintaining its position in 3 indicators, compared to the previous year.
According to the CMA annual report of 2022, the pace of public offerings in the Saudi capital market accelerated to hit a record, as a portion of 37 companies' shares were offered for public offering in the Main and Parallel markets valuing at SAR 40 billion. In the same context, shares of 13 companies were registered for the purpose of direct listing in the parallel market. The total number of listings during the year 2022 reached 49.
On the level of foreign ownership, 2022 saw record levels of net foreign investment in the Main Market, reaching about SAR 184 billion in the same year, while foreign investors' ownership value in the Main Market amounted to SAR 347 billion, representing 14% of the free float total value by the end of 2022. The foreign investment increasing rate during 2022 became the highest since the Saudi market joined MSCI Emerging Markets Index in 2019.
During the same year, CMA has approved three new implementing regulation i.e. Securities Exchanges and Depository Centers Regulations, in addition the Instructions on the Direct Financing Investment Funds and the Instructions for Shariah Governance in Capital Market Institutions. The CMA also amended seven relevant implementing regulations, rules, and instructions.
On the inspection level in accordance with CMA competencies; inspections conducted featured 91 licenses, divided into 53 cycle inspections, and 38 cause inspections. On the control level; the extensive search work of suspicion of violation of trading climbed 17.7% to reach 859 cases in 2022, compared to 730 cases in 2021, resulting in 11 suspected cases and 152 control inquiries.
The Annual Report also reported the increase of received reports to 1,653 in 2022, compared to 1,360 reports in 2021. Received complaints dipped 15.7% to reach 12,118 complaints, of which 11,354 were settled and 512 complainers were informed to head to the Committee for the Resolution of Securities Disputes (CRSD), while 252 are under study.
On the judicial level, the amounts of awarded compensation issued by final decisions by the CRSD amounted to SAR 1.75 billion, with an increase of 377.7% when compared to 2021.
The CMA has granted 17 permits for 4 financial technology (FinTech) experiment models, including 7 permits granted for models of investment and real estate funds distribution, 5 permits for Robo-advisory, 4 permits for offering and investment in debt instruments and one permit for equity crowd funding, bringing the total number of existing permits to 29 by the end of 2022.
From his side, His Excellency Mr. Mohammed bin Abdullah Elkuwaiz, Chairman of the Capital Market Authority praised the achievements of the Saudi capital market in the previous year. Elkuwaiz reported that the said records and milestones were achieved despite the economic challenges that shaded all global capital markets during 2022, the most important of which was interest rates raising globally and locally. Elkuwaiz stressed that such achievements are the reflect of strenuous efforts and dedication of all capital market system and employees aiming to place the Kingdom at its deserved position and achieve the CMA's strategic objectives to rank Saudi market as the leading market in the Middle East and place it among the top 10 capital markets globally, in line with the Kingdom's Vision 2030.
In the CMA's Annual Report for 2022, the Chairman of CMA commented, stating, “the CMA is creating the potential required to provide a suitable and encouraging environment for the capital market system to positively reflect on the Kingdom's economy". “CMA's sharing of data, information, and reports shall be reflected on the capital market by increasing transparency levels which shall, in turn, reflects on encouraging investment and promoting confidence of the Saudi capital market", Elkuwaiz added.