Tadawul, The Saudi Stock Exchange has become one of the top 10 stock exchanges globally in 2019, with a valuation of $2.4 trillion according to its annual report. The valuation of the stock exchange was boosted by the initial public offering (IPO) of State-owned Saudi Aramco which is the world’s biggest oil producer.
Along with Aramco, the listing of 5 other companies also raised another $4.67 billion. A total of 199 companies were listed in Tadawul in the time period. The Aramco offering which began at $25.6 billion was later increased to $29.4 billion.
The 12-month period was described as “a year in which we made a quantum leap” by Tadawul’s chairwoman, Sarah Al-Suhaimi.
“The Aramco listing at the close of the year brought us within the ranks of the leading exchanges globally, with a nearly five-fold growth in market capitalization. Tadawul has now acquired more international visibility and is seeking to expand its activities regionally and worldwide.”
The report stated that “Tadawul represented 76% of total market capitalization of the Middle East and North Africa region by the year-end.”
Even though Tadawul experienced a decline in its operating revenue of 3.2%, its net profit has witnessed a 3.4% increase.
Its All-Share Index had witnessed a high rise in May 2019 to 20.1% as the exchange was given the emerging market status by MSCI and S&P, the index providers. But, all the gains were wiped out later in the year due to geopolitical tensions until the IPO of Aramco helped to finish at a 7.2% higher value.
Tadawul’s Chief Executive Khalid Al Hussan stated that “This year, Tadawul is creating a clearing subsidiary, Muqassa, to reduce counterparty risk and will introduce derivatives trading.”
He further added that “The MT30 Index Futures will be launched first, to be followed by stock futures and options. Commodities may follow at a later stage.”
