Foreign investor accounts with Edaa hit 3,200 in January: Exec

Edaa chief executive officer Raed Al-Humaid

The number of foreign investor accounts at the Securities Depository Center Co. (Edaa) reached 3,200 by the end of January 2023, up nearly 23%, compared to 2,600 a year earlier, CEO of Edaa Raed Al-Humaid told Argaam on the sidelines of the Capital Market Forum.

He added that the steady increase in foreign investor accounts since 2022 positively indicate that the efforts of Edaa, Saudi Tadawul Group Holding Co. (Tadawul Group), the Capital Market Authority (CMA) and other concerned government agencies are on the right track.

Tadawul Group signed several agreements with a number of market regulators to secure an outstanding position for the Saudi stock market regionally and globally. It also aims to integrate with these markets in order to be able to lure and increase the number of investors from other markets.

Among the most important agreements concluded were those with the Abu Dhabi Securities Exchange (ADX) and Bahrain Bourse, Al-Humaid said. He added that work is still underway on agreements with Oman, Egypt, Hong Kong and Singapore. Thus, Edaa will take the necessary operational procedures and coordinate with these markets in this regard.

Touching on linkage with ADX, Al-Humaid said the depository records of the two centers are linked in terms of shareholders register and transfer of shares between the two markets. He added that tests are carried out almost on a daily basis, especially with foreign investors.

Linkage with regional and global markets contributes to enabling dual listings, which began after the dual listing of Americana Restaurants International PLC Co. between the Saudi Exchange and ADX.

The procedures for linkage with ADX depository center through linking the shareholders register, communicating with the custody center and transfer of securities enable investors to buy securities in one market and transfer them to the other.

Edaa is the main registry center for the Saudi stock market, as it plays a role in settling any transaction taking place in the market.

Furthermore, Edaa provides services to listed and unlisted companies, including dividend distribution, holding of general meetings, and keeping records. This will help companies in case they plan to go public in the future and enhance their reliability.

He added that Sukuk and bonds are registered by Edaa, but the registration for listing is made by Tadawul. Requirements for the listing or disclosure of any sukuk or bonds offered in the Saudi market is implemented by Tadawul, Al-Humaid added, noting that the actual buy and sell transactions between buyers and sellers are held with Edaa.

Moreover, sukuk and bonds trading increased significantly in 2022. The issuance of Al Rajhi Bank’s sukuk implied a strong momentum for these securities, as bonds and sukuk were mostly traded earlier by institutions, as well as public or private companies.

Al Rajhi sukuk were deposited in more than 60,000 accounts, which significantly activated the bonds market.

Al-Humaid said that Edaa started trial registration of private funds and is studying possible expansion of this move next year.

Edaa as a basic infrastructure institution of the capital market continues to work with other subsidiaries of Tadawul Group to help the market achieve a regional and global position.

In addition, Edaa works on ensuring the market infrastructure readiness for linkage with other markets, enabling the launch of new products and serving a new class of assets.