Tadawul to see $50 bln cash flows in 2019 upon emerging markets inclusion, says CEO

The Saudi Stock Exchange (Tadawul) is expected to attract cash flows of $40-50 billion (SAR 150-187.5 billion) in 2019, said Khalid Al Hussan, Tadawul’s Chief Executive Officer, in the annual report for 2018.

“These cash flows are driven by Tadawul’s inclusion into the emerging markets indices, in addition to the significant increase in the number of the qualified foreign investors,” Al Hussan said.

H2 2019 will likely witness Tadawul’s launch of the first exchange-traded derivatives product – an index futures contract, based on a tradeable index jointly developed by Tadawul and MSCI, the report said. 

Additional products will follow, including index options and single stock futures and options. 

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“Tadawul will likely take more measures to boost transparency and efficiency, and to lure more listings and investments,” Al Hussan noted.

Tadawul’s inclusion in FTSE and MSCI emerging market indices began in March. It completed three phases of FTSE and one phase of MSCI and S&P Dow Jones inclusion.

The second phase of MSCI inclusion will be finalized in August this year, whereas the fourth phase of FTSE inclusion and the second phase of S&P Dow Jones inclusion will be completed by September. 

Foreign investors, including strategic partners, own 7.45 percent of Tadawul as in June 2019, compared to 4.70 percent at the end of 2018.