Investors awaiting launch of Saudi derivatives market next week

Riyadh –  The Saudi Stock Exchange (Tadawul) is close to launching the Derivatives Market to start trading of the kingdom's first exchange-traded derivatives product.

Many market analysts affirmed the launch, set to take place on Sunday, 30 August, will considerably benefit the Saudi stock market, being a new investment opportunity. It will enhance the market's efficacy, emphasise its robustness while creating an attractive investment scene for foreign investors.

The financial derivatives market will offer investors a comprehensive and diversified range of investment products and services.

It was necessary to roll out invaluable investment products for both international and local segments after competent foreign investors directly entered the Saudi market and joined emerging markets indices, member of the Saudi Economic Association, Saad Al Thaqfaan, told Mubasher.

These tools diversify the market's investment scene and give investors hedging tools that help manage investment risks, he continued.

The derivatives market represents better investment options for traders in Tadawul and raises the market's liquidity, member of Securities Committee at Jeddah Chamber, Fahad Albugami, said to Mubasher.

However, the market is still a new product that traders should learn and understand more about it, he revealed.

For his part, financial consultant, Ali Al Jaafari, said the Saudi bourse is considered one of the biggest stock markets regionally and it became among the top 10 largest markets in terms of market value after the joining of Saudi Aramco.

The market does not need selling or buying transactions, but otherwise needs financial tools that help investors, such as financial derivatives and short selling, among others tools utilised in international markets, he concluded.

(Contributed by: Bedour Al Raie – Translated by: Amal A. Wahaab)