Riyadh’s financial landscape is poised for expansion with the addition of three new entities to its derivatives exchange. The announcement, made at the Saudi Capital Market Forum’s third installment, signals a significant development for the stock market.
Brokerage services are expected to commence later in the year by the trio of firms, Al-Rahji Capital, Alkhabeer Capital, and Aljazira Capital, as per a recent statement.
The forum also served as a platform for the Saudi National Bank to declare the successful debut of single stock options contracts. This initiative is anticipated to furnish both local and international investors with enhanced mechanisms for risk management and a broader spectrum of trading products.
In conjunction with the event, Saudi Tadawul Group, alongside State Street, unveiled an analytical report titled “Overview of Active vs. Passive Strategies in the Saudi Stock Market”. This study provides investors with a deep dive into the mutual funds’ stock selection methodologies and their implications for the Saudi stock market.
Insights from the report underscore the substantial growth in market capitalization within Saudi Arabia, soaring from SR2 trillion ($533 billion) to an impressive SR11 trillion. State Street’s Senior Investment Adviser, Ramu Thiagarajan, underscored this expansion during the forum, noting the evolution of market leaders in sectors such as technology and health.
Thiagarajan also noted an increase in the variability of returns across different companies, with some registering growth of 300 to 400 percent over recent years. He observed a contrast between trading patterns, predominantly non-institutional, and ownership, which is mainly institutional.
The democratization of participation in the Saudi capital market has led to a novel pattern of price discovery, Thiagarajan concluded.
The two-day Saudi Tadawul Group-organized event, themed “Powering Growth”, is designed to stimulate transformative dialogue and innovation, integrating emerging and established financial markets.
Highlighting the forum’s significance, economist and policy adviser Mahmoud Khairy underscored the importance of such events in fostering essential dialogue, collaboration, and innovation within the financial sector.