‎Stock split good option to spur liquidity: Analysts

‎Stock split good option to spur liquidity: Analysts

A number of Tadawul-listed companies have opted for stock split after Saudi Arabia approved the new Companies Law and its Implementing Regulations.

At the same time, Saudi Aramco is trading with no par value, while Americana Restaurants International is trading at par value of only SAR 0.08, which signaled a change in the par value applicable on the Saudi Exchange (Tadawul).

Under Article 103 of the new Companies Law, which entered into force on Jan. 19, 2023, a company’s shares may be divided into shares of a lower nominal value or merged in order to have a higher nominal value. Regulations and controls for the stock split and consolidation may apply.

“In the Saudi market, the stock split is a suitable and attractive option for companies to spur liquidity and complement the market amendments,” analysts told Argaam.

An Appealing Option for Some

The stock split option is an addition to corporate actions and builds on previous amendments made in 2006, said Jassim AlJubran, Head of Sell-Side Research at AlJazira Capital.

Americana stock listing at a nominal value of SAR 0.08 is an initial indicator for the market tendency to change the standard nominal value of SAR 10, especially after Saudi Aramco shares were exceptionally listed with