Mubasher: Saudi Arabia and the UAE are expected to have the majority of investment banking opportunities in the Middle East, Citigroup’s head of investment banking for the Middle East and Africa said.

Several Saudi firms are working on initial public offerings (IPOs), Miguel Azevedo told Reuters on the sidelines of a conference in Abu Dhabi, expressing his optimism about the level of demand for the Saudi stocks.

After ending its five-decade presence in the kingdom in 2004, the US lender was allowed to invest directly in the Saudi stock market in 2015. 

In 2018, Citigroup obtained an approval to start investment banking operations in Saudi Arabia and is currently seeking to get a full banking licence in the oil-rich kingdom.

Demand for Saudi securities plunged in 2018 due to tensions between Saudi Arabia and the west following the murder of the prominent Saudi critic and journalist Jamal Khashoggi.

However, foreigners returned to invest in Saudi equities in 2019, on the back of the kingdom’s potential inclusion in the emerging-market indexes of MSCI and FTSE Russell which is expected to draw $15 billion of benchmark-linked funds and billions more in active funds.

Foreign investors purchased SAR 4.36 billion ($1.2 billion) of Saudi stocks in January, data of the Saudi Stock Exchange (Tadawul) indicated, revealing that the Saudi benchmark index (TASI) rose about 9.5% in 2019.

Additionally, market sentiment towards the kingdom was “neutral to positive”, the top executive added.