(Bloomberg) — Saudi Arabias stock exchange, the Arab worlds largest, aims to sell shares in an initial public offering in 2018.
The Saudi Stock Exchange – Tadawul seeks to offer shares after completing a “readiness exerciseand obtaining the necessary approvals,” according to a statement on its website on Thursday. One of the worldsbiggest petrochemicals manufacturers, Saudi Basic Industries Corp., trades on the Tadawul All Share Index. The gauge closed 0.1 percent up on Thursday.
This year was the worst for Saudi stocks since 2008, even after the bourse allowed foreign investors to trade stocks directly for the first time in June. The kingdoms finances have been under pressure after its main source of revenue, oil, sank to the lowest level in 11 years and as the nation leads an expensive war in Yemen. The government on Monday said it would cut spending and ease subsidies in 2016.
“They are trying to engage the private sector in the economic expansion, and they dont want to rely on fiscal budget alone,” said Mohammed Alsuwayed, the head of capital and money markets at Adeem Capital in Riyadh. “Theres going to be a restructuring of the market in Saudi Arabia, its not just the TadawulIPO.”
Under the leadership of King Salman, who ascended to the throne in January, the government announced plansto privatize several sectors, the Finance Ministry said in a statement this week. The Tadawul All Share Index dropped 17 percent this year. The exchanges former chief executive officer Adel Al Ghamdiin May 2014 announced plans to hire banks for anIPO.
