| The Saudi 2030 Vision reforms continue unabated.
The Saudi stock exchange said it plans to launch exchange-traded derivatives on 30 August, in what would be a landmark move for markets in the region. The market’s first exchange-traded derivatives product is an index futures contract, the Saudi Futures 30 (SF30) based on the MSCI Tadawul 30 Index (MT30).
The launch aims to bolster the Saudi capital market and offer investors hedging tools to manage risk, and boost the Tadawul’s exposure to a broad range of investors.
The Tadawul is also eyeing more derivatives products such as single stock futures, single stock options, and index options to deepen the market. It is all part of creating a world-class capital market infrastructure as outlined in the Financial Sector Development Program (FSDP) under the overarching Saudi Vision 2030 umbrella.
“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,” Khalid Al Hussan, Tadawul chief executive said. “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.”
In July, the Saudi British Bank (SABB) joined the kingdom’s newly launched Securities Clearing Center Company, or Muqassa, as a General Clearing Member. SABB is only one of three general clearing members and one of eight members who completed all regulatory and technical requirements to become a member of Muqassa to conduct clearing activities.
The Saudi government has also been nimble throughout the pandemic. Authorities have taken 142 initiatives to date and allocated SAR 214 billion, in addition to SAR 47 billion for the healthcare sector, to mitigate the financial and economic effects of the pandemic. In addition, the Saudi Arabian Monetary Authority has rolled out a SAR 100 billion plan to support the economy.
The efforts are paying off as coronavirus cases slowly decline across the kingdom and businesses prepare to resume economic activity.
The country’s Industrial Production Index showed non-oil manufacturing activity rose by 7.1% in May compared to April, with production of paper, furniture and rubber and plastics leading the way, according to the General Authority for Statistics.
Consumer sentiment has also perked up with rising mortgage contracts and higher point-of-sales transactions in May compared to March and April.
Like the rest of the world, the Saudi economy will likely experience some more volatility as the government and businesses balance the need for health and safety of citizens and reviving economic growth.
But the kingdom appears to be on the right track. |
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