Saudi market regulator launches probe into weak IPO performance and bank advice

Saudi Arabia’s Capital Market Authority has opened a multi-month inquiry into the disappointing performance of recent initial public offerings, scrutinising advice given by global and domestic investment banks. The probe reaches back to at least early 2025 and requests documentation on pricing rationale, client discussions, share allocations and post-listing trading activity. While Saudi issuers secured $3.7 billion in equity last year—more than the rest of the Gulf combined—nearly 100 firms awaiting flotation have yet to complete significant IPOs this year.

Historically, Saudi IPOs delivered strong returns, but 10 of 13 listings in 2025 were trading below issue price by January. Notable examples include flynas and Specialized Medical Company, whose shares fell sharply after debut. The CMA expects to deliver its report and recommendations to the government later this year, aiming to boost market activity without targeting banks or investors for sanctions. Analysts view the move as a response to a broader regional slump exacerbated by the Iran conflict.