Tadawul to introduce market makers in H2, says Al Hussan

The Saudi Stock Exchange (Tadawul) will start implementing the market making program from the second half of 2018, Khalid Al Hussan, chief executive officer, Tadawul, told Argaam on Thursday.

"We are working very closely with potential market makers and potential issuers to introduce market making activities in the main equity market and Nomu parallel market by the second half of the year," he said.

The exchange will also introduce primary dealers as announced by the Debt Management Office, Al Hussan added.

In June, Saudi Arabia’s Finance Ministry appointed five local banks - Alinma Bank, Bank Aljazira, National Commercial Bank (NCB), Samba Financial Group and Saudi British Bank (SABB) -  as primary dealers in local government securities.

Following Tadawul’s inclusion in MSCI Emerging Market index, Al Hussan said the focus will now be on activating the Central Counterparty Clearing House (CCP).

"We are working very closely with the company to make sure that the regulatory framework, operational procedures, the platforms and the market participants are ready for our planned activation of the clearing house in the second half of 2019.”

The CCP will start clearing of derivatives in the second half of 2020, he revealed.

"It’s a big change... it’s a big change in the set-up of the capital market practice in the Saudi Arabia and we are focusing very closely on that," Al Hussan emphasized.

When asked about Tadawul's initial public offering (IPO), the CEO said the IPO will certainly happen but the timing will depend on multiple factors.

"What is important for us now is the timing. The current reforms were not in place and so what we are doing now is making sure the file is ready and making sure the factors... the changes that we have implemented and the changes that we plan to implement are taken into account to determine the timing," he stated.

Tadawul has taken all the steps to go public by setting up two companies with a capital of SAR 1 billion since the initial announcement of IPO in 2015, Al Hussan said.

"We will more transparent on determining the appropriate time as per our plan and alignment with the shareholders during the second half of this year,” he disclosed.

Write to Reem Abdellatif at reem.a@argaam.com