As high as 63% of previously Family-owned Firms’ Market Value, Increased

As much as 63% of the previously family-owned businesses have increased their market value, following the listing, on Tadawul stock exchange, the Capital Market Authority (CMA) clarified, as per a research concluded report.

Indicating the multiple benefits of listing family businesses, on the financial markets, the report put the long-term continuity of the company, atop.

Sustainability of family businesses across generations, is the main challenge facing them, in order to survive and grow, it added.

However, offering and listing on the financial markets increases the chances of continuity and sustainability of these companies.

In this context, the Authority’s Undersecretary for Strategic and International Affairs, Yazid Al-Dumaiji explained that the financial market plays a prominent role, in supporting family businesses to achieve the highest levels of growth and administrative and operational efficiency, by offering and listing these companies, in the market, thus increasing the levels of governance, transparency and continuity of the company’s business for several successive generations.

Pointing to the report, he shed light on the development of family companies listed on the Saudi stock market, and the role of the authority’s strategic objectives, in achieving the desired results to facilitate financing and deepen the financial market.

“The Capital Market Authority pays great attention to the family business sector as a crucial economic tributary, as the authority’s efforts and strategic objectives have been significantly reflected, in the toll of annual listings since 2017, he added, explaining that  family businesses constitute 92% of the initial offerings, in the parallel market “NOMU”.

That is in order to suit the listing requirements and raise the incentives offered to companies, listed on the a financial market.

Overall number of family companies listed on the Saudi stock market (the main as well as the parallel markets) stood at 53, and these companies represent 33% of the total companies listed on the stock exchange, as the number of family companies, on the main market reached 43 family companies, while there are 10 family companies, on the parallel market (Nomu), Abdullah Al-Moqbel, Director of Research Department, at CMA elaborated, adding that these family companies are positioned, in 15 sectors out of 21 sectors, in the main and parallel Saudi financial markets, which translating the diversity of activities for family businesses, with no concentration, neither in only one sector, nor in a few.