The main Saudi index has gone past 10,000 points for its best levels in some time. The regulator's IPO could be the next Big Bang. Image Credit: AP

Dubai: Watch out for an IPO in Saudi Arabia this year… from its stock market regulator.

The Saudi Stock Exchange (Tadawul) will be transitioning into a holding group structure, which “signals its readiness for the IPO in 2021”. The new entity will be known as the Saudi Tadawul Group, and feature four subsidiaries.

These are the Saudi Exchange, the Securities Clearing Center Company (Muqassa), the Securities Depository Center Company (Edaa) and Wamid, which is a newly created a tech-focussed entity.

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Sarah Al-Suhaimi, current Chairperson of Tadawul's board of directors, will be Chairperson of Saudi Tadawul Group, andKhalid Al-Hussan will be the CEO. “Comprehensive capital market reforms are not only prudent, but essential to ensuring higher economic growth, and achieving the nation-wide goal of the successful delivery of Saudi's Vision 2030 and aligned with the strategy of the Public Investment Fund (PIF)," said Al-Suhaimi in a statement.

With the new holding company, the group expects to benefit from the “integration and synergies” between the subsidiaries. “The operational independence of each subsidiary will create an agile environment supporting rapid responses to evolving market trends,” the statement added.

Technical analysis on Dubai action

On Thursday morning, Dubai's benchmark index gained 1.07% and is currently near 2,586.65 points. Price action seems to be consolidating near 2,560.00 levels with 8-, 21- and 34-day exponential moving averages roped in, according to Kaia Parv of FXPrimus.

Kaia Parv, Head of Investment Research at FXPrimus

"Price has been moving sideways since late March, and technical indicators support further range-bound movement. Area of interest, acting both as a support and a resistance level, is near 2,572.75, which overlaps with 62% Fibonacci retracement level.

"Next resistance is near 50-day simple moving average of 2,582.10. Support is near 2,557.30, and 2,542.90 that are respectively 50% and 24% Fibonacci retracement levels."