DUBAI, July 26: Family businesses form the backbone of Saudi Arabia’s economy, accounting for SR 350 billion (USD 93.3 billion) or 25 per cent of its gross domestic product, although very few of them are listed.
There are more than 5,000 family businesses across the Kingdom, of which only 156 are listed on the Saudi bourse, according to Jeddah Chamber of Commerce and Industry (JCCI) Chairman Saleh Kamel.
“This is a small figure compared to the prospects this market holds,” Kamel was quoted as saying by the Arab News.
He was speaking at the opening of forum on ‘Family-owned businesses vs Saudi stock companies’.
There are a number of factors that make owners hesitate in converting them to joint stock firms, most importantly the issue of inheritance, fear of losing family revenue and some technical difficulties, Kamel said.
He added that transformation of family businesses to joint stock companies would lead to opening new investment opportunities for them and making their businesses flourish.
According to Kamel, the move would provide stability to millions of employees working in these companies. “Family businesses are now studying how to restructure themselves in line with the circumstances that occurred in the markets recently.”
Companies are trying to cope with market changes like avoiding dependence on a specific investment strategy, diversifying their portfolios with new activities and adopting plans inspired by the post-global financial crisis, he said. (PTI)
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