dubai financial market: saudi stock exchange set to start single stock options trading

Saudi Arabia will soon introduce single-stock options trading to further increase liquidity in the Middle East’s largest stock market, people familiar with the matter have said.

The Tadawul exchange plans to allow options trading in five to 10 companies initially in the coming weeks, the people said, asking not to be identified as the information is private. The exchange will start listing more stocks when they meet certain criteria, they said.

The Tadawul did not immediately respond to requests for comment.

This step would mark the final step towards liberalizing the Riyadh stock exchange and encouraging the participation of foreign investors. The kingdom opened one of the world’s most closed stock markets to increased international participation just over five years ago, and then began allowing foreign investors to participate in initial public offerings.

In September 2020, the managing director of Tadawul Group Holding Co., Khalid Al-Hussan, said that the exchange planned to introduce single stock futures. Index futures started trading in Riyadh in August of the same year.

Exchanges in the Gulf region are increasingly introducing derivatives trading, with the Dubai Financial Market and the Abu Dhabi Stock Exchange creating markets for equity futures.

Saudi Arabia’s benchmark has jumped around 11% this year, building on a 30% gain in 2021. Riyadh leads the region in IPOs, and the listings pipeline is “deeper than ever,” Al-Hussan said after Tadawul’s surge. on its own commercial debut in December.

–With the help of Farah Elbahrawy.

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