New enhancements to Nomu will speed up listing process: Tadawul CEO

The direct listings on the Nomu Parallel Market are expected to speed up the process and avoid IPO-related costs, Khalid Al Hussan, chief executive officer at Saudi Stock Exchange (Tadawul), told Argaam.

"New entrants can now opt either to float 20 percent of shares or SAR 30 million of capital directly for trading for 12 months, and the book-building process is still available for all companies," Al Hussan said.

Companies will set the opening price via an auction, and the price fluctuation rate on Nomu will be increased to 30 percent from the current 20 percent, he noted.

"The share rising to 30 percent during the trading session is subject to several criteria including a trading halt for two to five minutes upon hitting limit-up,” he added.

Al Hussan also indicated that the auction IPO mechanism will help inject fresh cash in stocks.

Last week, Tadawul announced a series of significant measures to boost liquidity as well as listings on Nomu. These new measures will be implemented in two phases -- the first in Q1 2019 and the second in Q2 2019.

Newly announced measures include allowing direct listings on Nomu without an IPO, determining the regulations pertaining to the listing of the Nomu companies on Tadawul, turning quarterly financials into semi-annual statements, updating the minimum liquidity threshold, cutting the minimum threshold of share transactions, and introducing the Nomu Capped Index.

Changes to be rolled out in the second phase include listing close ended funds and real estate investment trusts (REITs) on Nomu, implementing the fluctuation limits, and setting up a new fund for researches and analytical studies.

Overall, the measures announced would primarily help to bring in new listings to the Nomu market, thus develop an alternate fundraising avenue for the SME sector, as well as increase market volumes.