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.
