The financial sector in Saudi Arabia is poised for growth as the Saudi stock market prepares to welcome three new entities into its derivatives segment. The announcement came during the third iteration of the Saudi Capital Market Forum, marking a significant development in the local financial landscape.
Brokerage services will soon be expanded with the addition of Al-Rahji Capital, Alkhabeer Capital, and Aljazira Capital, slated to commence operations later in the year, as revealed in a recent statement.
In conjunction with the forum, the Saudi National Bank celebrated the successful inauguration of single stock options contracts. This strategic enhancement is expected to empower both domestic and foreign investors to more effectively mitigate portfolio risk and to partake in a broader array of trading products.
Alongside these advancements, Saudi Tadawul Group, in collaboration with State Street, introduced a seminal report entitled Overview of Active vs. Passive Strategies in the Saudi Stock Market
. The document scrutinizes the performance and impact of mutual funds’ stock selection techniques and serves as an invaluable resource for investors interested in the nuances of the Saudi stock market.
Ramu Thiagarajan, a Senior Investment Adviser at State Street, during his presentation, shed light on the significant growth of the Saudi market capitalization, which has surged from SR2 trillion to an impressive SR11 trillion. The evolution of the Kingdom’s growth plans has resulted in a shift of market leaders in various sectors, with technology and health industries now at the forefront.
Thiagarajan also pointed to a notable increase in cross-sectional dispersion in return patterns since 2020, highlighted by the remarkable rise in value of certain companies by 300 to 400 percent over the last few years. Despite most trading activity being attributed to non-institutional investors, institutional investors maintain predominant ownership.
The democratization of participation in the Saudi capital market has introduced new price discovery patterns over time, concluded the adviser.
The two-day forum, orchestrated by Saudi Tadawul Group and themed “Powering Growth,” strives to be the epicenter of groundbreaking discussions and innovation, melding emerging markets with well-established financial systems. The importance of such forums is underscored by economist and policy adviser Mahmoud Khairy, who emphasized to Arab News the critical role these dialogues play in fostering synergy and ingenuity within the financial sector.