What is Capital Markets?
Capital markets are financial markets where long-term debt or equity-backed securities are bought and sold. They channel savings into productive investments and include both primary (issuance) and secondary (trading) markets.
How It Works
- Issuers raise long-term capital by issuing shares, sukuk, or bonds.
- Investors trade these securities on exchanges or OTC.
- Regulators ensure transparency, disclosure, and orderly trading.
Saudi Context
The Saudi Exchange (Tadawul) and the parallel market Nomu host equities and ETFs, while the sukuk and bond market is growing fast. The CMA regulates issuance, disclosure, and listed-company conduct.
Example
A Saudi industrial group raises SAR 1.5 billion through a sukuk listed on the Saudi Exchange to fund a new petrochemical line.