Saudi Gazette report

RIYADH — The Saudi Stock Exchange (Tadawul) is expected to witness the entry of 30 new companies during the current year, according to Mohammed Alkuwaiz, chairman of the Board of Directors of the Capital Market Authority (CMA).

“Three companies are already listed in the market this year while two others are making preparations to float into public circulation,” he said while addressing the Saudi Financial Sector Conference (FSC) here on Monday.

Addressing the first panel of the event titled “KSA ESG Ecosystem: Opportunities and Challenges,” Alkuwaiz said, "Saudi Arabia has made great progress and has drawn up plans, policies and proposals for the development of the financial sector."

Fahad Al-Mubarak, governor of the Saudi Central Bank (SAMA), delivered the opening speech at the session.

In his speech, Al-Mubarak shed lights on the growing global trend in sustainability and climate change. “The most important challenges facing environmental, social and corporate governance (ESG) are structuring disclosure and the investment approach, which makes it difficult for investors to take a decision,” he said while stressing that this is important with regard to environmental factors.

Speaking on behalf of Minister of Finance Mohammed Al-Jadaan, Assistant Minister of Finance for Macro-Fiscal International Relations and Chairman of Supervisory Committee of FSC Abdulaziz Al-Rasheed highlighted the Kingdom’s efforts to achieve sustainability. “Formulating a scheme for a sustainable financial system for Saudi Arabia is a strategic step in the Kingdom’s Vision 2030 march towards sustainability and commitment to the concept of environmental, social and corporate governance and its implications for the global financial system,” he said.

Al-Rasheed stressed that renewable energy is at the heart of the energy requirements of mega projects, in addition to the efficiency and accuracy driven by advanced technology applications, which will attract sustainable financing. He pointed out that the Red Sea Development Company is a clear example, as it will secure a loan of about SR14.12 billion, and these are “the first riyals through credit facilities for green finance.”

Other speakers of the panel were Chairman of the King Abdullah Center for Studies Fahad Al-Ajlan and CEO-designate of the National Center for Debt Management Hani Al-Medaini.

In his address, Al-Ajlan said: “We proposed the creation of a specialized government platform to develop the financial sector in the Kingdom. The center takes into account the fact that the financial sector is a step towards change, and that attractive investment must be available, which is important to achieve sustainability.”

Al-Medaini said the Kingdom has set a medium-term goal to access various financial markets at reasonable rates, after it was very limited due to challenges and obstacles. “The digital transformation allowed the Kingdom to reach a reasonable level in terms of investments with the expected start of diversified use of green energy by 2022, including financing plans,” he added.

The second panel with the theme of “ESG Capital Markets: The New Investment Landscape,” was moderated by Vice Chairman of Capital Markets at HSBC Jean Mercer.

The conference is organized by the Finance Ministry, Saudi Central Bank and the Capital Market Authority, which are the partners of the Financial Sector Development Program. FSC is one of the Financial Sector Development Program’s initiatives, launched by the Council of Economic and Development Affairs as one of Vision 2030 programs. It aims to realize Saudi Vision 2030 objectives, through creating a diversified and effective financial sector that supports the development of the national economy.

The event is the first talk of an introductory series for the second edition of FSC set to be held in the first quarter of 2022. The event aimed to discuss the growing role of ESG and the overall efforts to fill the financing gaps, achieve sustainable financing aligned with the UN sustainability objectives, and direct the financial institutions to make value in the long run with ESG instruments; to reach sustainable capitalistic markets and increase the sustainable financing scope.

The event brought together entrepreneurs to communicate and exchange ideas and experiences, to discuss the investment opportunities in developing the Saudi finance sector, especially attracting local, regional and international entrepreneurs, representatives of public and private sectors, including high-profile international consultations and financial institutions, credit agencies, and experts in financing, investment, banks and insurance.

The second edition of the Financial Sector Conference has sought, since its launch in 2019, to achieve interdependence integration within the financial sector ecosystem through its various tools and means. In addition, it aspired to achieve sustainable growth within a resilient financial stability framework, while employing innovative tools for the development and management of services.