Saudi Arabia Tadawul Stock Exchange to Launch Single Stock Futures

The Arab world’s biggest bourse, Saudi Arabia’s Tadawul exchange, plans to launch single stock futures on July 4 with the underlying stocks selected from the largest and most liquid publicly listed companies. The move is aimed to enable local and international investors to hedge and manage portfolio risks more effectively. The Kingdom is utilizing its resumed power in financial markets through high oil prices.

Saudi Arabia Stocks

Saudi authorities have introduced a raft of reforms to attract overseas share buyers and issuers as part of efforts to lure foreign capital and diversify the oil-dependent economy. The moves began in earnest with the Aramco IPO and the Tadawul’s inclusion MSCI Emerging Market benchmark. Saudi Arabia’s stock exchange undertook reforms to earn the inclusion to the FTSE Index, as well as the S&P Dow Jones Indices.

The aim was to have the Kingdom of Saudi Arabia’s equities will have a 2.9 per cent weighting in the FTSE Emerging All Cap Index once all the five inclusion phases in the benchmark gauge are complete by March 2020. FTSE Russell’s chief executive, Waqas Samad told The National this could attract as much as $7bn.

Source: TC, Reuters

From The TradersCommunity Research Desk