The companies, some of them among the largest businesses in the Middle East, are active in sectors from real estate and petrochemicals to banking and transport, Nasdaq Dubai said in a statement. These companies account for 43 per cent of the Saudi stock exchange, or Tadawul, as the largest Arab equities market is known, it added.
Nasdaq Dubai announced the names of 12 Saudi Arabian companies on which the exchange will launch equity futures in September 2018.
The 12 companies are some of the Middle East’s largest businesses, active in sectors from real estate and petrochemicals to banking and transport. Their combined market capitalization is 859 billion Saudi riyals (229 billion US dollars), representing 43% of the market capitalization of the Saudi Stock Exchange (Tadawul), the largest exchange in the region.
The companies are: Saudi Basic Industries Corporation (SABIC); Al Rajhi Bank; Alinma Bank; Almarai Company; Dar Al Arkan Real Estate Development Company; Etihad Etisalat Company; Rabigh Refining and Petrochemical Company; Saudi Arabian Mining Company; Saudi Cement Company; Saudi Electricity Company; Saudi Kayan Petrochemical Company; and Altayyar Travel Group.
Hamed Ali, Chief Executive of Nasdaq Dubai, said, “We are delighted to provide investors with new hedging and leverage tools that support their ability to play an active role in the Saudi equity market through trading our futures. The launch of these products in Dubai reflects the growing synergies between the capital markets of the GCC.”
Nasdaq Dubai’s futures will enable investors to make gains whether share prices are rising or falling. This will stimulate further investor interest in the Saudi capital markets. The single stock futures will be traded on Nasdaq Dubai in Saudi riyals (SAR), which is the currency of the underlying shares.
The TASI share index of the Tadawul has risen 16% so far this year and traded value on the exchange has reached SAR 475 billion, up 9% from the same period last year. MSCI and FTSE Russell announced earlier this year that they will upgrade Saudi Arabia to Emerging Market status.
Nasdaq Dubai launched UAE futures trading in September 2016 with single stock futures on seven UAE-listed companies. That number has since increased to 17 and in February 2018 theexchange added futures on Dubai Financial Market’s DFMGI share index as well as the ADI index of Abu Dhabi Securities Exchange. Nasdaq Dubai announced in May 2018 that it would add Saudi single futures but did not name the companies at that time.
More market participants are preparing to join Nasdaq Dubai’s derivatives market as it expands. Further product additions will include futures based on stocks and indices of various exchanges in the MENA region as well as options.