RIYADH: Saudi Arabia’s capital market institutions reported a 27 percent surge in operating income in the second quarter of 2024 – reaching SR4.1 billion ($1.1 billion).

Data released by the Kingdom’s Capital Market Authority indicated that the standout performer was asset management, contributing the largest revenue share at 31 percent, totaling SR1.28 billion — a 22 percent rise compared to the same period last year.

Investments followed closely, accounting for 30 percent of income at SR1.21 billion, which marked a 15 percent decline from the previous year.

Dealing activities ranked third, generating SR603.67 million, representing a 15 percent share and a 22 percent year-on-year increase.

Meanwhile, investment-banking revenues soared by 66 percent, reaching SR406.18 million and comprising 10 percent of total income.

The combined net profit, reflecting earnings after all expenses, zakat, and taxes, decreased by 3 percent to SR2.05 billion, down from SR2.13 billion in the same quarter last year.

This decline was largely driven by a rise in non-operating expenses, significantly impacting the bottom line.

On the trading front, the Saudi market led with SR900.35 billion, capturing 94 percent of the total traded value by local capital market institutions.

In contrast, US markets accounted for just 6.1 percent, totaling SR58.56 billion. The remaining share was distributed among other markets, including those in the Gulf Cooperation Council and the wider Arab world, Asia, and Europe.

According to the report, these institutions saw a significant boost in their aggregate balance sheet, with total assets climbing 29 percent to nearly SR73.25 billion, up from SR56.83 billion in the same quarter of 2023.

Liabilities surged by 68.73 percent year-on-year, reaching SR27.79 billion. Meanwhile, shareholders’ equity grew by 13 percent compared to the previous year, totaling SR45.42 billion.

According to a KPMG report, the Saudi stock exchange has swiftly evolved from a local market with limited options into the world’s 10th-largest by market capitalization.

This remarkable growth is largely attributed to reforms implemented by Tadawul and the Capital Market Authority, aligning with Vision 2030’s goals of economic diversification.

The report highlighted that increased foreign investment has significantly bolstered these reforms.

The Kingdom’s capital markets have remained resilient despite global economic uncertainties, such as high inflation and geopolitical tensions.

In 2022 alone, they attracted SR50.8 billion through initial public offerings and rights issues. This surge in market activity is fueled by improved liquidity, heightened investor confidence, and the government’s push for privatization and economic expansion, all supported by favorable oil prices.

Saudi Arabia’s CMA launched a strategic plan for 2024-2026 to enhance its debt market and asset management industry, highlighted during the September Debt Markets and Derivatives Forum held in Riyadh.

The plan includes over 40 initiatives focused on increasing market transparency, introducing special-purpose acquisition companies, and facilitating Saudi depositary receipts to attract local and international investors.

Key goals include boosting the stock market’s value to 80.8 percent of gross domestic product by 2025 and expanding the debt market to 24.1 percent of GDP. The strategy also emphasizes regulatory reforms, fintech growth, and improved investor protection to establish the Kingdom as a leading global financial hub in line with Vision 2030.

RIYADH: Small and medium enterprises constitute 90 percent of Saudi Arabia’s industry and minerals companies, revealing that the sector is not “exclusive” to top players, according to a senior official.

The comments by the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, were made during a dialogue session at an event organized by the General Authority for Small and Medium Enterprises, known as Monsha’at, the Saudi Press Agency reported.

During the Industry and Mineral Resources Pioneers week, officials highlighted the impact of pioneering projects in the sector, underlining how industrial technical applications, often led by SMEs, effectively resolve challenges in large-scale industries, SPA said. 

In recent years, the Saudi government has launched several initiatives to bolster SMEs’ presence and participation in various sectors, including industry and mining. 

These undertakings, spearheaded by entities such as Monsha’at, focus on providing a range of support services, including financing, licensing facilitation, and business development support. 

Programs like the SME loan guarantee program – known as Kafalah – and the Saudi Venture Capital Co. are designed to enhance access to capital, mitigating one of the significant challenges faced by smaller companies.

Other examples of SMEs demonstrating innovative capabilities in the sector include improving mine preservation, environmental safety, and productivity.

This reflects the broader trend within Saudi Arabia, where SMEs increasingly leverage technology and innovation to address complex industrial challenges.

In an interview with Alekhbariya, the minister said due to facilitating regulation efforts in the Kingdom, “opening a factory is easier than opening a restaurant.” 

He added that the government is “working on building factories and leasing them to investors to support them and ease the burden on them,” as part of its goal to bolster entrepreneurs and sustain their projects.

The Saudi government’s support extends beyond facilitating market entry for SMEs. There is a concerted effort to ensure the long-term sustainability of these enterprises, helping them navigate the industry landscape and overcome operational hurdles. 

The mining sector, in particular, presents a wealth of opportunities, and the ministry has identified over 100 initiatives and incentives designed to empower entrepreneurs and SME owners within this space. 

This focus on creating a supportive ecosystem is intended to encourage more entrepreneurs to explore the untapped potential of the mining sector.

The initiatives are part of a broader strategy to cultivate a vibrant SME sector capable of contributing significantly to Saudi Arabia’s economic growth and diversification. 

By providing the necessary tools, resources, and regulatory support, the government aims to harness the full potential of SMEs, ensuring they remain a driving force in the country’s industrial and economic development. 

As Saudi Arabia continues to transform its economic landscape, the empowerment and growth of SMEs will remain at the forefront of this journey.