Tadawul unveils structural Changes to Nomu, parallel market for SMEs

RIYADH: The Saudi Stock Exchange (Tadawul) has announced a series structural changes to Nomu – the Parallel Market aimed at supporting the growth, development and sustainability of the market, increasing the number of listed companies on Nomu and enhancing the market liquidity.

The changes come after two years of launching Nomu as part of Tadawul and CMA strategic plans to support SMEs; a vital source that contributes immensely to the growth and the diversification of the economy.

The structural changes are planned to be implemented in two phases, the first one will be in Q1 2019, and the second will launch in Q2 2019.
Changes in the first phase include provisions to allow direct listings on Nomu Parallel Market without an IPO (initial public offering); requirements for issuers to report financial earnings on a semi-annual basis instead of quarterly based reporting; streamlining the process for issuers to transition from the Parallel Market to the Main Market; establishing access mechanisms by applying minimum liquidity threshold, reducing normal trade threshold, and introducing Nomu Capped Index.

Changes to be rolled out in the second phase include listing Close Ended Funds and REITs on Nomu, introducing volatility guards and introducing independent research.[the_ad id=”32940″]Commenting on the announcement, Khalid Al Hussan, Chief Executive Officer of Tadawul, said: “These initiatives are part of our ongoing strategic plans to further develop Nomu-the Parallel Market. We are constantly working on making Nomu a more flexible attractive platform for both investors and potential companies. Throughout the past two years, we have been carefully analyzing the market and taking into consideration the needs of market participants”.

“The changes also come hand in hand with the Saudi market upcoming inclusion in FTSE Russell and S&P international indices as an emerging market in March 2019, followed by the inclusion in MSCI Emerging Market Index in May 2019, which will enhance the Saudi market’s position among international markets,” Al Hussan added.

The changes are an important step towards fulfilling Tadawul’s plans to further develop the capital market, and are in alignment with the objectives of the Financial Sector Development Program part of the 2030 Vision, which stresses the importance of developing a more advanced capital market open to the world, allowing greater funding opportunities and stimulating economic growth. This will in turn generate more diverse investment opportunities and instruments for all capital market participants.

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