Margin trading facilities down 50% on Tadawul in Q4 2016

The total trading facilities granted by brokerage firms to clients on the Saudi Stock Exchange (Tadawul) dropped around 50 percent year-on-year (YoY) to SAR 6.8 billion in Q4 2016, representing 58 percent of available margin financing, Saudi Arabia’s Capital Market Authority (CMA) said in a report. 

Available margin facilities also fell by 53 percent YoY to SAR 11.8 billion in the same period.

Clients receiving facilities decreased by 33 percent YoY to 2,021 in Q4 2016. 

The CMA had earlier raised the minimum ratio required to cover margin calls to 34 percent of the transaction’s total value, from the previous 25 percent.

The initial margin requirement, which enables clients to open margin accounts, will also be raised 50 percent in 2017.