Saudi Arabia’s Public Investment Fund (PIF) has engaged Morgan Stanley and Riyad Capital to advise on the initial public offering (IPO) of its wholly owned tech subsidiary, Saudi Information Technology Company (Site). Expected to take place next year, this offering will feature Site, which provides cybersecurity, cloud computing, and systems integration services.
Site was established in 2017 as part of PIF’s broader strategy to boost its investments in technology and innovation. The need for robust cybersecurity and cloud services in Saudi Arabia has grown significantly, aligning with the kingdom’s Vision 2030, which aims to diversify the economy away from oil dependency by fostering various sectors, including technology.
In light of the global economic environment, Site’s potential IPO arrives at an intriguing time. Last year, PIF reported a 60 percent profit decline, citing high interest rates and inflation. This downturn, however, appears not to have dampened its plans for Site’s public offering, highlighting PIF’s ongoing commitment to tech and innovation.
Market rumours suggest the Saudi Capital Market Authority is currently seeking feedback on easing foreign investor access to its markets. This coincides with the Tadawul stock exchange seeing a 5 percent jump in late September following news that foreign investors could potentially take larger stakes in Saudi-listed firms. These regulatory shifts aim to stimulate investor interest and fuel a vibrant market environment.
The Saudi Stock Exchange’s main index has seen a modest decline this year, contrasted by the upbeat scene in Dubai, where the index has risen 15 percent. Despite this, Saudi companies have managed to raise $3.3 billion from IPOs so far this year. This continues the momentum from last year, a period that marked the most active IPO period outside of the historic Saudi Aramco listing.
As the IPO market gets busier, the focus on tech investments, including cyber defence and cloud services, hints at PIF’s broader long-term strategic plan, which encompasses ambitious goals extending into the 2040s and beyond. Such initiatives are part of Saudi Arabia’s effort to attract sustainable investments while curtailing market volatility.
