Tadawul Expands with Derivative Instruments, Future Contracts

An investor monitors a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia January 18, 2016. (Reuters)
An investor monitors a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia January 18, 2016. (Reuters)
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Tadawul Expands with Derivative Instruments, Future Contracts

An investor monitors a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia January 18, 2016. (Reuters)
An investor monitors a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia January 18, 2016. (Reuters)

In a bid to provide new opportunities for investors and hedge equity trading risks, the Saudi Stock Exchange, Tadawul, announced the launch of trading in derivative products on August 30.

In a statement on Tuesday, Tadawul said that the launch of the financial derivatives market was aimed at expanding the scope of opportunities in the Saudi market - one of the largest markets in the world in terms of size and liquidity.

Khalid Al-Hussan, Tadawul chief executive, said the move was “further evidence of our commitment to providing our investors with diversified, innovative products and services to meet all their needs.”

He noted that the first derivative to be traded would be an index futures product, the Saudi Futures 30, based on the MSCI Tadawul 30 index launched last year.

He emphasized that other sophisticated financial instruments would be introduced at gradual stages.

“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,” Al-Hussan said in the statement.

Tadawul, is currently the only entity authorized to act as a stock market in the Kingdom, listing and trading in securities of public joint stock companies.

Following the Saudi Aramco IPO - the largest offering in history - the Saudi stock market rose to ninth among 67 financial markets in the International Federation of Stock Exchanges in terms of volume.

In remarks to Asharq Al-Awsat, the Tadawul CEO underlined that the new product would further attract investments in the Saudi market.

The derivatives launch falls within the Financial Sector Development Program initiative of the Vision 2030 strategy to diversify the economy away from oil dependency.



Oil Prices Reset as Supply Uncertainty Reigns

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Reset as Supply Uncertainty Reigns

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil lost early gains on Tuesday and prices were back near their previous close in the face of uncertainty over how supply will be affected by Ukraine-Russia peace talks, international trade tariffs and OPEC+ crude output.

Brent crude futures were up only 1 cent at $75.23 per barrel by 1242 GMT, retreating from $76.07 earlier in the session.

US West Texas Intermediate crude futures were up 51 cents from Friday's close to $71.25 a barrel. There was no settlement for WTI on Monday because of the US Presidents' Day holiday, Reuters reported.

"Each rally seems to find willing sellers, whether or not it is because of neighbouring technical numbers that keep movement trapped or notions of a war settlement topped with tariffs is hard to tell," said John Evans of oil broker PVM.

"Day trading and short-term flows are ruling the fate of oil prices at present."

US and Russian officials held more than four hours of talks in Riyadh on Tuesday, their first on ending the war in Ukraine. But Moscow made a new demand: that NATO cancel its 2008 promise on Ukraine membership.

Ukraine was not at the talks and has said that no peace deals can be made on its behalf.

If a deal is reached, Washington and its allies could abandon sanctions throttling the supply of Russian oil to the world.

Oil prices were bolstered on Tuesday by a Ukrainian drone attack on a Russian pipeline that pumps about 1% of global crude supply.

The damage could reduce oil transit volumes from Kazakhstan by about 30% and take up to two months to repair, Russian oil transport company Transneft said.

Another question hanging over oil markets is whether OPEC+ is considering a delay to monthly supply increases scheduled in April.

Russian state media said the group's members were not looking to hold off from the increases after Bloomberg News reported that OPEC+ members were exploring a possible delay.