Spotlight: Awtada’s offering for investor relations in Saudi Arabia

Saudi management consultancy Awtada helps organisations in the Kingdom with a range of services. One of its offerings focuses on helping listed companies with investor relations. Leaders of the practice outline the firm’s experience and services in the domain.

Saudi Arabia is opening up to international investors, making investor relations more crucial than ever. The Kingdom has seen a significant increase in the number of companies going public, with a 20% growth rate in local companies pursuing Initial Public Offerings (IPOs) over the past year.

This surge underscores the necessity for companies to adopt transparent reporting practices, including detailed ESG disclosures, to attract and retain investors.

At Awtada, we understand the importance of CMA regulations in ensuring transparent disclosures. These regulations reduce information asymmetry between retail investors and the companies they are looking to invest in, which is vital for building investor trust and confidence and fostering a more transparent and accountable market environment.

CMA Regulations

The Capital Market Authority (CMA) in Saudi Arabia has established rigorous regulations to ensure transparent disclosures, which are crucial for building investor trust and confidence. These regulations help reduce information asymmetry between investors and the companies they are looking to invest in.

At Awtada, we emphasize the importance of these regulations, guiding our clients to adhere to them meticulously to enhance their investor relations.

The Role of Non-Financial Elements in Board Reports

While financial performance is a critical component of board reports, non-financial elements are equally important. These include disclosures related to ESG activities, which provide investors with a holistic view of a company's operations, risks, and opportunities.

However, it is important to distinguish between board reports and ESG reports. Board reports focus primarily on business and governance aspects, while ESG reports delve into environmental and social impacts. Some advanced companies are moving towards integrated reports that combine both, but in Saudi Arabia, that number is still relatively low.

Many companies may not have formal ESG frameworks but still report on sustainability and Corporate Social Responsibility (CSR). These efforts are crucial and count towards building a positive reputation and investor confidence. At Awtada, we encourage our clients to adopt elements of sustainability and CSR into their reports, gradually moving towards comprehensive ESG frameworks.

Our Experience with Publicly Listed Companies

At Awtada, we help our clients in presenting honest, unbiased assessment of qualitative facts that can supplement their financial results. We have extensive experience in supporting companies with their investor relations efforts.

For instance, we worked with a publicly listed mining company during its first year after their IPO to elevate their standard of communication with investors. By integrating ESG elements into their board reports and enhancing transparency, we helped them build stronger relationships with their investors and set a new standard in the industry.

Over the past four years, Awtada has worked with several renowned financial institutions in supporting them develop their Annual Board Reports. This entails ensuring that the financial product itself is appropriately explained to every potential investor be it retail or institutional.

Awtada’s team of analysts have follow methodological process to develop such investor collateral. This includes formulating an effective list of inquiries and gather the relevant information from the client, developing the right layout and structure for delivering the report content, developing the content in both Arabic and English, ensuring design-content fit, and most importantly ensuring that the report is in alignment in the Capital Market Authority’s disclosure requirements. 

Conclusion

Awtada is dedicated to supporting the transformation of investor relations and ESG practices in Saudi Arabia. By leveraging our values of creating impact, maintaining independence, tailoring solutions, and fostering a collaborative culture, we help our clients navigate the evolving landscape and achieve sustainable growth.

As Saudi Arabia continues to embrace transparency in company and ESG reporting, positioning the Kingdom as a leader in sustainable and transparent business practices, we look forward to continuing our work with clients to develop integrated board reports that combine annual financial reporting with ESG elements, enhancing transparency and fostering trust.