Tadawul is the largest stock market in the MENA region with a market capitalization of SAR 11.3 tn at the end of 2023 with a 14% y-o-y increase, according to the latest Tadawul figures (pdf). Tadawul was followed by the Abu Dhabi Securities Exchange (ADX), the Dubai Financial Market (DFM), and Qatar Stock Exchange (QSE).

Last year saw 35 companies debut on the local exchanges — eight on the main market Tadawul and 27 on Nomu, the report reads. Tadawul topped the list of MENA exchanges in terms of the number of IPOs in 4Q 2023 accounting for 14 out of 19 regional offerings, according to an EY report.

A 2023 snapshot: The main market saw SAR 1.3 tn worth of shares traded by the end of last year — a 22% y-o-y increase. Brokers had some 94 mn opportunities to generate trading fees. Meanwhile, Nomu closed 2023 with a market cap of SAR 48 bn. Some 638 mn shares were traded last year with a combined value of SAR 8 bn through the execution of 679k transactions.

Tadawul and Nomu have strong pipelines in place for 2024, including Aramco’s potential blockbuster secondary sale.

• On the main market: eXtra, Modern Mills, and Smasco all (or will soon have) live transactions, while Singapore’s Olam Group, hypermarket operator Lulu, and Aster DM Healthcare are exploring listings here.
• On Numu: Yaqeen Capital and Al Taqat Mineral have said they’re eyeing IPOs

FAST FACT- MBC, which went public earlier this year with a USD 222 mn share sale, is the world’s top performing this year.

SOUND SMART- Nomu is Tadawul’s version of London’s AIM, offering lighter listing and financial reporting requirements in a bid to attract companies at earlier stages of development, including smaller businesses and startups. There is no profitability requirement to list on Nomu, which is open only to qualified investors (read: most day-trading retail investors need not apply). Want to go deeper?Tap or click here.

Wondering what requirements companies must meet to list on Tadawul or Nomu? Here’s the list:

• Corporate structure: Issuers on Tadawul and Nomu must be joint-stock companies, ensuring a structured and regulated corporate entity;
• Operational history: Tadawul issuers must have engaged in a primary business activity for at least three consecutive financial years under consistent management, while Nomu issuers need only one year;
• Size: Tadawul issuers must meet a minimum market capitalization of SAR 300 mn, while that figure is only SAR 10 mn for Nomu companies;
• Minimum float: Tadawulissuers must float at least 30% of issued shares, while Nomu issuers must float at least 20% of their issued shares or SAR 30 mn worth of shares— whichever is lower;
• Profitability track record: Unlike the main market, no profitability track record is required of Nomu issuers, enabling newer companies to access the capital market;
• Public shareholders: Tadawul issuers must have at least 200 public shareholders at the time of listing — ensuring a broad investor base — while Nomu issuers can have only 50 shareholders;
• Financial transparency: Tadawul issuers must have published audited financial statements covering a minimum of the previous 3 financial years. This rule isn’t applicable to Nomu issuers;
• Restructuring period: If the Tadawul issuer has undergone restructuring, a waiting period of one financial year post-restructuring completion is necessary before listing. This rule isn’t applicable to Nomu issuers;

• Advisory appointment: While appointing a financial advisor is mandatory, the appointment of a legal advisor is optional for Nomu issuers;
• Direct listing: Nomu Issuers can opt for a direct listing without offering new shares through selling shares owned by existing shareholders directly on the exchange once the stock begins trading;
• Earnings results: Upon listing, Tadawul issuers are required to consistently publish quarterly results within 30 days of the close of each quarter and they have three months to publish full-year results. Nomu issuers are required to publish 1H results within 45 days of the end of the period; they, too, have three months to release FY figures.