Tadawul eyes new financial products; in advanced talks with 3 GCC firms on cross listing: Alhussan

Khalid Alhussan, CEO of Saudi Tadawul Group Holding 

Saudi Tadawul Group Holding Co. (Tadawul Group) aims to lure new investors and boost trading of current institutional investors, CEO Khalid Alhussan told Argaam, on the sidelines of the Saudi Capital Market Forum. 

He added that the group seeks to offer new financial products and services, which allows for stronger and better competition.

Tadawul is witnessing a strong listing momentum. “Therefore, there must be a balance between increased listings and money injected into the market as additional funds,” Alhussan said.

He added that the group is in advanced talks with two to three GCC companies as regards their cross listing on the main market.

Commenting on the criteria set by the group for offering corporate futures, the CEO said the main criterion is demand, which means that the stock market adds futures contracts to a certain company, whenever there is a demand from investors.

Tadawul decided to launch the product, and eight to 10 companies will be selected to start offering corporate futures. This number will, accordingly, increase as per the market’s and investors' needs.

This is based on simple criteria such as the size of the company and its liquidity.

The group is mainly focusing on the derivatives market, Advanced Solutions Co. (Wamed) and Securities Clearing Center Co. (Muqassa) to grow its business, as it is working to accelerate the pace of adding products to the derivatives market.

Alhussan added that the futures contracts will be launched in the next quarter, and will offer the options contracts in the following stage. “The options contracts will be launched on the capital market at the end of 2022 or in early 2023,” he said.

Elsewhere, the top executive added that Tadawul is working to improve the listing process in the market as well as the new retail subscription, in addition to reducing the costs of listed companies, increasing the effectiveness and speed of retail subscription.

In addition, the group focuses on expanding the range of services provided by Muqassa.

Touching on the impact of increased initial public offerings (IPOs) on the market liquidity, Alhussan said market liquidity is still robust.

He indicated there is no clear homogeneity between listings and liquidity in the market, as they are closely monitored and may be changed later.

“The IPOs undoubtedly attract fresh funds to the market,” Alhussan concluded.