Saudi Arabia's new issue market has effectively closed. Three companies have listed on the main market so far in 2026, Dar Al Balad, Saleh Abdulaziz Al Rashed and MSGA, raising a combined 144 million dollars. Over the equivalent eight month period of 2025 the figure was 3.53 billion dollars across a far larger cohort, which puts this year's issuance at roughly 4 per cent of last year's.
The contrast with the recent past is starker still. The full year 2025 produced 25 listings raising 3.7 billion dollars, and 2022 produced 17 listings raising 9.8 billion dollars. The market has not simply slowed, it has stopped.
The reason is aftermarket performance, not appetite
The number that explains the freeze is this one: of the 17 companies that have listed since the start of 2025, only four trade above their issue price. That record is what has hardened the buy side, and it has produced the predictable consequence. Mutlaq Al Ghowairi, Arabian Dyar and Kesay Clinics have all postponed offerings this year, and six month extensions granted to Alandalus Educational and Alromansiah have expired without either company coming to market.
An issuer facing that backdrop has two choices, price materially below where its advisers initially indicated, or wait. Most have waited, and the longer the queue extends the harder it becomes for the next issuer to price, because the unexercised approvals themselves become evidence that the market will not clear.
What the regulator is proposing
The Capital Market Authority has responded with proposals that shift risk decisively towards the underwriters. Underwriting commitments would bite from the start of the book build rather than at its conclusion, and underwriters would be liable for shares left unsubscribed. Issuers would be required to publish forward looking forecasts covering at least a year.
Each of those is a discipline measure aimed at the pricing problem rather than at volume. Taken together they make it more expensive to bring a weak deal, which is the point, but they also raise the cost of bringing any deal. One consequence flagged by market participants is that the effect falls hardest on smaller issuers and on aggressively priced offerings, which is to say on exactly the cohort that has been postponing.
The demand side is the larger lever
Two further proposals matter more for volume than any of the underwriting changes. The 49 per cent ceiling on foreign ownership is under review, a change Morgan Stanley has estimated could draw 7.4 billion dollars of inflows. Separately the regulator has floated capping public money market funds at 5 per cent overseas investment within two years, which would redirect an estimated 7 billion dollars towards domestic assets.
Those are demand measures, and they are the ones that would change the arithmetic. Tightening underwriting standards improves the quality of what is offered. Only widening the pool of buyers fixes a market where four fifths of recent listings trade below issue.
The backdrop is not helping. The Tadawul All Share Index has given up its gains for the year following a weak third quarter, which removes the rising market that new issues normally need.
