Weak spots that betray a powerful performer

The Saudi equities regulator, the Capital Market Authority (CMA), has a reputation as one of the region's toughest watchdogs.
However, some financial professionals still believe the kingdom lags behind in levels of transparency and investor relations (IR) practice.
Formed in 2004, when the Saudi Arabian Monetary Agency, the central bank, decided equities and bond markets needed their own regulator, the CMA went through a stiff initiation during the share collapse of 2006 and introduced tough rules.
So far, these have helped to prevent another chaotic meltdown such as 2006.
The biggest crisis of confidence in the Saudi financial system of recent years has been the feud between the trading family Al Gosaibi and the financial entrepreneur Maan Al Sanea.
This has shaken dozens of foreign banks that are left owed billions of dollars in total. But experts point out it was not a matter for the equity regulator but the central bank and that it quickly became a highly charged political issue.
"Saudi is an important market for the society, which has a growing number of members there and another major IR training event for listed companies, with Tadawul, in September," says Paul Reynolds, a Rothschild banker who is also the chairman of the Middle East Investor Relations Society .
"In most jurisdictions, the local exchange is a critical partner and, although we don't yet have a chapter in Saudi, Tadawul is a very active promoter of best-practice IR."
Others point to a weakness in overall investor relations culture.
"Investor relations is the weak part in the set-up," says Jamal Al Kishi, the chief executive of Deutsche Securities Saudi.
"Saudi has lagged behind and we'd like to see an improvement.
"Some corporates are not taking it seriously enough and it's just left to small, junior offices that don't understand what should be done to improve IR."
 
fkane@thenational.ae