More number of Saudis are turning to on-line transactions today than ever before, particularly buying of company shares through initial public offerings (IPOs), according to a report released by Capital Market Authority (CMA), Saudi Arabia's capital market regulator. The percentage of Saudis who earlier preferred to buy shares through conventional procedure such as filling out forms at local banks has dropped from 86 percent in 2003 to 16 percent as of second half of 2008. “This is clearly a sign of major shift to modern technology,” said the report and added, “the Saudis had very little trust, perhaps due to the lack of knowledge of on-line financial transactions. They are now more technical savvy, particularly when it comes to on-line buying of shares in the Saudi Stock Market.” It is becoming a more prevalent practice to buy shares through the use of ATM machines, every time a company has IPO offering, it said. Statistics revealed that during the six months of 2008, 45 percent of all shares subscribed in Saudi Arabia of new IPOs were through the use of ATM machines. Phone banking stood second at 22 percent while the Internet became the third option accounting for 17 percent. Interestingly, filling out forms at local bank branches formed the last choice with only 16 percent of subscribers, said the CMA's recent survey. “Visiting local bank to fill out a form to buy shares has now become the last option for Saudis eager to buy shares in major IPOs in the Saudi stock market,” it said. Internet in Saudi Arabia was introduced in 1998 but by 2003 hardly three percent of the Internet users turn to on-line buying of shares in new IPOs listed in the market, the CMA report stated. The number however increased dramatically over the years and as of second half of 2008, around 17 percent of all subscribers in Saudi Arabia purchased their shares through the Internet, it said. While giving detailed account of a comparative study of IPO subscribers the CMA report said during the 2003-2004 around 85 percent of subscribers resort to using forms at local banks, the phone banking stood at seven percent while ATM accounted for a six percent and Internet a mere three percent. However, the percentage of subscribers using bank forms for IPO subscription as of first six months of 2008 dramatically dropped to 16 percent, it said. The CMA said as of this month, subscribers have pumped SR29.68 billion in the Saudi stock market through eight major IPOs. CMA, the Kingdom's regulator of the Saudi bourse has approved 12 new companies to be enlisted in the Saudi bourse this year - eight of which have been enlisted on the Tadawul share index. The overall number of companies listed in the Saudi market has jumped from 57 in 1990 to 123 by the end of this year with an increase of 110 percent and CMA hoped to include the general public in the country's economic, investment and development activities. Saudi Arabia's stock market recently jumped to second place internationally beating the London Stock Exchange in terms of IPOs listings in the first half of 2008, it said. Meanwhile, according to market sources subscribers in Saudi Arabia are eager to buy shares of Saudi Arabian mining company Ma'aden, which is expected to offer SR9,250,000,000 through IPO during the second half of this year. Ma'aden's IPO is considered to be the second biggest IPO in the Saudi market history. __
