The reception area of the Saudi Stock Exchange, also known as Tadawul
The reception area of the Saudi Stock Exchange, also known as Tadawul, in Riyadh. Image Credit: Bloomberg

DUBAI: The Tadawul bourse is expected to attract capital inflows of $40-50 billion (Dh146.9-183.6 billion) in 2019 following the upgrade of the index on the emerging market index of major benchmarks.

In 2019, FTSE Russell, MSCI and S&P DJI upgraded the Tadawul index to its emerging market gauge after the bourse implemented policies to attune the exchange’s operations with that of its global peers.

“The fact that we have come close to achieving emerging market status in a short period of time augurs well not only for Tadawul but also for the Kingdom as a whole, considering our role in supporting the goals of Vision 2030,” Khalid Abdullah Al Hussan, Chief Executive Officer of Saudi Tadawul, said.

500

foreign investors currently in the Tadawul bourse

Foreigners had been ploughing money into the Kingdom in anticipation of the upgrade. The bourse saw a five fold jump in the number of foreign investors to 500 last year and companies raised $4.21 billion last year. The exchange accounted for 52 per cent of the total market capitalisation to 1,840 billion Saudi riyals, and 82 per cent of the total traded value in the region.

As far as the financial performance is concerned, the operating revenue increased by 6.9 per cent to 583 million Saudi riyals in 2018, while the gross profit increased by 13.9 per cent to reach 285 million riyals.

“A high level of liquidity is one of our strengths. The measures we have taken to promote transparency and efficiency as well as improving our infrastructure should continue to attract more listings and investors, especially foreign investors. We are well on course in our strategy execution and thus continue to support the economic development of the Kingdom and the prosperity of her people,” Al Hussan said.

1,840b

Saudi riyals is Tadawul market capitalisation

The value of shares traded was 870.87 billion riyals during 2018, an increase of 4.1 per cent over the 2017 figure of 836.28 billion riyals.

“These achievements are all the more impressive when seen against the backdrop of a year where the emerging market index suffered a sharp decline,” the bourse said in a statement.

The bourse plans to launch derivatives in the second half, with the launch of index futures to be followed by options and other derivatives.