Tadawul officially launches first derivatives market, clearing house.

Saudi Arabia’s stock exchange (Tadawul) has officially entered the derivatives marketplace, a move that is seen to boost the kingdom’s capital market.

The Saudi Stock Exchange announced on Sunday that it has launched its first Derivatives Market and a clearing house, the Securities Clearing Centre Company (Muqassa).

In a statement, the exchange also unveiled the first exchange-traded derivatives product, which is called the MT30 Index Futures. The new product is an index futures contract based on the MSCI Tadawul 30 Index (MT30).

The exchange also plans to roll out more derivatives products, including the Single Stock Futures, Single Stock Options and Index Options.

The launch of the derivatives market is considered to be a vital move that will provide investors more exposure to the Saudi capital market. It is part of the key initiatives under the Saudi Vision 2030.

“This is a significant step in introducing sophisticated market products and creating a trading environment that is attractive to local as well as international investors,” said Khalid Alhussan, Tadawul’s CEO.

“The launch of Derivatives Market will provide investors with hedging tools to more effectively manage risk and gives expanded opportunities to gain exposure to the Saudi capital market, the largest and most liquid market in the region,” Alhussan added.

Both the derivatives market and the clearing house are running on Nasdaq’s market technology, which currently powers more than 250 of the world’s market infrastructure organisations and market participants.

As of this year, the Saudi stock market is considered the largest largest stock markets among the 67 members of the World Federation of Exchanges.

source: zawya