Tadawul to adopt global industry classification standards

The Saudi Stock Exchange (Tadawul) is planning to reclassify its current market sectors to match global standards by adopting the Global Industry Classification Standard (GICS) by January 2017.
The move aims to enhance transparency in the local market and allow international investors access to better information on the performance of local sectors, Tadawul said in a statement.
Tadawul’s earlier sector classification had been in place since 2008. However, with continuous developments in the Saudi economy, new industries have emerged, both in  the private and public arena.
These developments on the economic front also necessitate changes to be reflected in the classification of companies listed on Tadawul, according to information found on its website. 
In the previous sector classification at Tadawul, companies  choosing  to go public were assigned to sectors that were probably not accurately representing the business of these companies due to classification limitations.
The new classification system adopted by Tadawul provides a solution to these limitations  by closely aligning a company’s business activities and sources of revenues to its sector classification.
Tadawul’s previous sector classification had limitations as it was not based on global classification standards. Furthermore, there were no periodic reviews of companies to reflect changes in the assigned classification due to any change in business profile of these companies. 
Tadawul plans to communicate all key information related to GICS and the new industry classification of listed companies to market participants and the public through conducting workshops and media awareness campaigns.
This information will also be available on Tadawul’s website through the New Industry Classification page.

Source: Arab News