The launch of the Derivatives Market aims to further support the growth of the Saudi capital market by creating new opportunities for investors, providing them with hedging tools to manage risk, and to expand exposure opportunities to one of the largest and most liquid markets in the world – the Saudi Market. As the market develops, Tadawul has plans to roll out more derivatives products such as Single Stock Futures, Single Stock Options, and Index Options.
Eng. Khalid Al Hussan, CEO of Tadawul, said: “Today, we can proudly say that our capital market is not only the largest in the region but also developing faster than most exchanges in terms of both the products and the services we offer. The introduction of derivatives trading is further evidence of our commitment to providing our investors with diversified, innovative products and services to meet all their needs.”
“The launch of the Derivatives Market in Saudi Arabia as one of the Financial Sector Development Program (FSDP) key initiatives under the Saudi Vision 2030 is a significant step in introducing sophisticated market products and creating a trading environment attractive to local as well as international hedgers and traders,” Al Hussan added.
Saudi Stock Exchange (Tadawul) is the sole entity authorized in the Kingdom of Saudi Arabia to act as the Kingdom’s securities exchange (the Exchange), listing and trading in securities. Following the listing of Saudi Aramco, the largest IPO in history, Tadawul is the 9th largest stock market among the 67 members of the World Federation of Exchanges and is the dominant market in the Gulf Cooperation Council (GCC). The Exchange is the 3rd largest stock market amongst its emerging market peers. For more information see: www.tadawul.com.sa
About MSCI Tadawul 30 index (MT30)
The MSCI Tadawul 30 Index (MT30) was launched by Tadawul and MSCI and went live on January 30, 2019. The MT30 Index is derived from the broader MSCI Saudi Arabia Index and is designed to reflect the performance of the approximately 30 largest and most liquid stocks listed on Tadawul based on free float capitalization.
Initial constituents of the Index represent approximately 87% of total market capitalization of the wider Saudi Arabian market. The weighting of individual securities in the index is capped at 15% to minimize concentration risk. The index will be rebalanced quarterly (close of the last business day of May, August, November and February coinciding with Index Reviews of the MSCI Global Investable Market Indexes.)
Mohammed Al Abdullah
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