The Capital Market Authority of Saudi Arabia (CMA) and Tadawul are mobilizing to increase the momentum of stimulating the Saudi private sector towards the transformation into joint-stock companies and to benefit from the financial markets in the country, especially the parallel market, Nomu.
This is coupled with indicators of economic recovery in the aftermath of the coronavirus lockdown and its lifting.
The past few days have witnessed active mobility from the CMA and Tadawul to raise awareness in the private sector.
They set out to encourage small and medium-sized companies and invited entrepreneurs to take advantage of financial market financing.
They invited family companies to seize the opportunity of the financial market to gain sustainability through the Tadawul market and Nomu, especially with providing the incentives and procedural facilities.
CMA Chairman Mohammed El-Kuwaiz, said that family companies are to get sustainability through the Saudi financial market; which has recorded tangible progress that contributes in practical terms to adding an effective financing channel to develop businesses for companies.
El- Kuwaiz pointed out that 30% of family businesses avoid public offering; due to a fear of losing control of the company.
But studies prove that more firmness and steadfastness come after the offering in front of challenges. El- Kuwaiz pointed out that the dominant percentage of shares remains for the original owners.
He also underlined the relationship between disclosure and corporate governance; risk reduction related to family business management; and the low cost of financing after listing. He explained that CMA regulations place clear considerations for the relationship between shareholders and founders of family businesses.