By Gavin Gibbon, November 1, 2024
Kuwaiti firms are setting their sights on the Saudi Arabian stock market, with potential listings on the Tadawul exchange anticipated as early as next year. This development marks a significant step in deepening economic ties between Kuwait and Saudi Arabia.
The push for cross-listings comes nearly two years after both countries’ market regulators signed agreements to enhance collaboration between their exchanges. Firas Al-Salem, chairman of the Kuwaiti Business Council, confirmed that several Kuwaiti companies are preparing to take advantage of this opportunity, as reported by Asharq News.
Currently, the Boursa Kuwait hosts 149 companies, while the Tadawul has 232, with Saudi Arabia experiencing a surge in initial public offerings (IPOs) this year, bolstered by high-profile listings such as Saudi Aramco’s $11.2 billion secondary offering in July.
The Saudi Tadawul Group has reported impressive financial results, with net profits reaching SAR506 million ($135 million) in the first nine months of 2024, reflecting a remarkable 70% year-on-year increase. Meanwhile, Boursa Kuwait also enjoyed a successful year, reporting a 14.5% rise in net profit to KD14 million ($46 million) for the same period.
Several companies are already planning to join the Tadawul, including Al Majed for Oud Co, a perfumer, and the Arabian Company for Agricultural and Industrial Investment (Entaj), a poultry producer based in Riyadh. The Tadawul is recognized on major global indices such as MSCI, FTSE Russell, and S&P Emerging Markets, enhancing its attractiveness for investors.
In addition to the stock listings, Kuwait’s two largest banks are gearing up to expand operations in Saudi Arabia, aiming to tap into financing opportunities created by the kingdom’s Vision 2030 initiative. Trade volume between the two nations has already reached approximately SAR11 billion in 2022, with over SAR6 billion recorded by July 2023.
Further strengthening these ties, Kuwait’s sovereign wealth fund, which manages assets exceeding $800 billion, plans to establish an office in Saudi Arabia. A feasibility study for a proposed rail link between Kuwait City and Riyadh was also approved, highlighting the commitment to strategic cooperation.
Saudi Arabia’s Minister of Transport, Saleh bin Nasser Al-Jasser, emphasized the significance of these developments, stating that they represent “an important step toward enhanced strategic cooperation between the two countries.” As Kuwaiti companies prepare to make their mark on the Tadawul, the future looks bright for this burgeoning economic partnership.
