(MENAFN- The Arabian Post) Saudi Arabia's stock exchange, the Arab world's largest, aims to sell shares in an initial public offering in 2018.
The Saudi Stock Exchange € Tadawul seeks to offer shares after completing a "readiness exercise and obtaining the necessary approvals," according to a statement on its website on Thursday. One of the world's biggest petrochemicals manufacturers, Saudi Basic Industries Corp., trades on the Tadawul All Share Index. The gauge closed 0.1 percent up on Thursday.
This year was the worst for Saudi stocks since 2008, even after the bourse allowed foreign investors to trade stocks directly for the first time in June. The kingdom's finances have been under pressure after its main source of revenue, oil, sank to the lowest level in 11 years and as the nation leads an expensive war in Yemen. The government on Monday said it would cut spending and ease subsidies in 2016.
"They are trying to engage the private sector in the economic expansion, and they don't want to rely on fiscal budget alone," said Mohammed Alsuwayed, the head of capital and money markets at Adeem Capital in Riyadh. "There's going to be a restructuring of the market in Saudi Arabia, it's not just the Tadawul IPO."
Under the leadership of King Salman, who ascended to the throne in January, the government announced plans to privatize "several sectors," the Finance Ministry said in a statement this week. The Tadawul All Share Index dropped 17 percent this year. The exchange's former chief executive officer Adel Al Ghamdi in May 2014 announced plans to hire banks for an IPO.
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