Saudi Arbaia’s Stock Exchange (Tadawul) announced that it will launch an exchange-traded derivatives product, the Saudi Futures 30 (SF30), on August 30th in a bid to attract investment interest into the Kingdom, according to reports.
The SF30, an index futures contract, is based on the MSCI Tadawul 30 Index (MT30), which was created last year.
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, the Tadawul said in a statement.
Saudi Arabia’s futures market will launch on August 30th.
The launch of the SF30 is part of a financial-sector reform program under the banner of Vision 2030, where progress in opening up the Kingdom to investment has been steady. Saudi Arabia introduced last year new regulations allowing for broader foreign ownership of publicly traded firms and adjusted rules to make it easier for foreign companies to sell shares on the main market. Tadawul also promoted trading and listing on the parallel market for small and mid-caps, known as Nomu, which has lighter listing requirements, as the Financial Times notes.
“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,” Eng. Khalid Al Hussan, CEO of Tadawul, 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.”
“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.
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.
