New Saudi stock market ‘Nomu’ for SMEs opens with gains of 20pct on debut

BE2C2 Report – Saudi Arabia on Sunday launched a parallel equity market designed to boost small and medium enterprises (SMEs) that closed up 20 percent, the maximum allowed in a single day, brokers said.

The index on the parallel market, Nomu, listing seven companies, closed at 6,000 points with trading of about $67 million (256 million Saudi riyals).

The seven companies, of which the index is comprises, all rose to their daily limit at 20 percent.

Argaam, a Saudi economic website, put the total capitalization of the seven companies trading on Nomu at $479 million (1.8 billion riyals).

The companies listed are Raydan Restaurants, Baazeem Trading Company, Arab Sea, Al Omran Trading, Abdullah Saad Abo Moati, Food Development Company and Al Samaani Metal.

Argaam said Baazeem Trading Co. was the most actively traded, with 2.4 million shares changing hands in 1,725 transactions.

Abdullah Saad Mohammed Abo Moati Stationeries Co. came second, with 2.2 million shares traded in 1,153 transactions.

Meanwhile, Arab Sea Information Systems Co. recorded the lowest trading volume for the day at 39,700 shares, which were traded in seven transactions.

To be listed on Nomu, companies must have a market value of at least 10 million riyals ($2.7 million), a minimum of 35-50 shareholders and at least 20 percent of shares publicly owned.

Firms listing on the oil-rich kingdom’s main stock market — the Tadawul — must have minimum capitalisation of 100 million riyals, or 10 times that of the new platform.

Nomu’s launch was announced last Monday by Tadawul which said the new equity market was “an alternative trading platform with lighter listing requirements”.

Saudi Arabia’s “Vision 2030” reform plan to diversify its oil-dependent economy aims for small and medium sized firms to account for 35 percent of GDP, up from 20 percent.

Tadawul, which has a capitalization of about $400 billion, opened to direct investment by qualified foreigners for the first time in 2015.

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BE2C2 is a business unit of Irshad Salim Associates  and publishes reports, news, infographics, analytics and analyses based on available data and related information from sources readily available on the web and in the public domain.

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