Saudi Arabia is the first country in the Gulf countries to implement the idea of direct listing in the financial market

Al-Quwiz encouraged companies during the meeting organized by the Asharqia Chamber on Tuesday evening October 27, 2020, and managed by the Chamber’s Chairman, Abdul Hakim bin Hamad Al-Ammar Al-Khaldi, the companies to pay attention to implementing governance procedures, indicating that this raises the rates of business continuity and expansion in their investments, pointing to a study confirming that companies Those that adhere to high standards of governance get 30 percent of investor evaluation and positive outlook for companies that do not adhere to the same level of standards.​

Al-Quwiz said that listing in the financial market has several benefits and outlets, the most prominent of which is financing, as the financial market is ultimately a financing channel for productive projects that are in vogue and also characterized by a high ambition to finance their future projects and their growth in a sustainable manner, and went on to say that financing is either by increasing their capital or Through the exit of its shareholders to invest in other projects that serve the national economy.

Among the benefits that accrue to the company, Al-Quwiz said that the company, after its inclusion in the financial market and the transfer of ownership stakes in it into publicly traded securities, enables the owners, even if they do not want to sell, to obtain financing personally in exchange for their shares in ownership more than they would have been able when their companies were considered companies Especially, in addition to the marketing and coverage advantage, as part of the procedures for offering and listing in the financial market is working to expand the scope of knowledge of the company and its commercial features, which is what people, institutions and governments want to deal with and this is what we witnessed during the last period when we noticed that a remarkable number of companies Medium and small businesses are going through the experience of offering and listing in the financial market, and we began to notice the effect of the offering and listing process on the company's business and on the customers' satisfaction to deal with it because it became a customer and a shareholder at the same time.

Regarding the benefits of listing, Al-Quwiz pointed to many incentives that pervade work on them, which give listed companies a competitive advantage over other companies, whether in the state's procurement system or the Industrial Development Fund and many other government agencies, in addition to the advantage of attracting qualified cadres and competencies who increase their desire for Working for the company, especially when it becomes a listed company and has declared financial statements, disclosure, governance and separation between ownership and management, which gives those who work in the company reassurance that they work in a professional work environment and adds an element of positivity to these cadres, is that the listed company has the ability to reward them through stock ownership programs.

Al-Quwiz explained that the mere offering of the company and its inclusion in the financial market transfers ownership shares in it to shares that are considered securities that become a weapon for the company or a currency that it uses in the acquisitions or merger process and thus becomes a means for the company to expand its activity and maximize its market share, in addition to the company's sustainability and ensuring its continuity. Many successful companies change and stand either as challenges due to disagreements between partners, leaving an executive team, or leaving an owner. Their presence as a joint-stock company enables the sustainability of the entity regardless of its owners, board members, or executive team.​

On the issue of fear of listing, Al-Quwiz pointed out that in the recent period the pace of communication with market participants has increased in order to communicate any changes and updates that have been worked on during the last period and to understand the elements of concern for companies and their owners from the process of offering and listing and during the communication stage we found a number of concepts The misconceptions, including that the offering and listing process begins and ends with the Capital Market Authority, and the truth is that the Commission’s role lies in the last link in a long process of equipping the company, preparing it and preparing its requirements. Apprehension, which is the prevalence of conversations about the authority requesting that the company be one of the companies that achieve profits in its business before the offering, and this is not correct as one of the requirements for listing is to provide the financial statements of the company within 3 years and not to be a profitable company.​

Among the misconceptions, Al-Quwiz said that some people feel that the line of offering and listing is irreversible, and the truth is that part of the financial market system and its organizations is to find a return line for the company that wants to terminate its listing, pointing to a known mechanism related to the optional cancellation of the listing, however, there is no company that has implemented it yet. In addition, some may argue that some companies are not welcome in the offering and listing, and this information is incorrect, as the regulations of the Authority and the financial market do not differentiate between the size or the sector, but that all companies are welcome, and the difference may differ in the attractiveness of the company and the desire of investors to invest Finally, incorrect information spread about that the minimum bid requirement, which is 30 percent, is irreversible, and the truth is that, given only two previous years, the market granted exemptions to many companies by achieving a smaller percentage, especially companies with a large business volume, because the authority and with this Companies can be assured that even if the company is offered at a lower rate, it will maintain a high amount of liquidity, and this is what they aim for​.

On the fact that many companies resort to financing from banks and not the financial market when financing is needed, Al-Quwiz said that banks are the main financing channel, but some companies reach borders with banks. Either they want a greater opportunity or that the financing is not enough or not suitable for them, or because of the focus on risks Some projects or areas of expansion that are not compatible with the idea of ​​bank financing that is based on a fixed asset guarantee, as bank financing is known financing, with a known timeframe and a known rate, even if its costs are low, but usually the risk rate increases in some companies which banks take into account when thinking about granting loans. Especially in circumstances where there is high volatility, such as what the world is facing now from the effects of the Corona pandemic, and in those cases companies resort to the offering, which is a sustainable source of financing and is an additional source of financing, pointing to a third tributary that has begun to appear, which is financing through debt issues, whether they are bonds. Or instruments or others, as it has become a financing channel through the financial market, available through banks​

Al-Quwiz​ explained during the meeting that the advantage of the direct listing is for companies that basically fulfill all the requirements of the offering before the offering process, noting that Saudi Arabia is the first country in the Gulf to implement this idea.