Second equity index for Saudi market

Dubai has signed an agreement with index provider FTSE Russell to launch derivatives based on FTSE’s Saudi Arabia equity indexes.

The announcement follows last week’s news that Tadawul, the Saudi stock exchange, and index provider MSCI are set to launch a tradeable index containing Tadawul’s biggest and most liquid stocks.

Both initiatives come on the back of both FTSE Russell’s and MSCI’s decision to include Saudi Arabia on their respective emerging market indices, a move that will take effect later this year and is likely to attract more than $15 billion in passive, index-linked funds as well as billions more in active funds. 

The benchmark inclusion is also an important step in the development of Saudi Arabia’s derivatives market. The licence agreement with FTSE Russell also follows Nasdaq Dubai’s launch of single stock futures on 12 Saudi companies in January. 

“As investors prepare for the inclusion of Saudi Arabia into FTSE Russell’s global equity benchmarks, we are delighted to collaborate with Nasdaq Dubai to enable the launch of Saudi index futures,” said Waqas Samad, chief executive of FTSE Russell.  

“Saudi equities are some of the most heavily traded of all the region’s markets, and the futures contracts are an important additional tool to give regional and international investors efficient access to this dynamic market. The Middle East region is key to our overall strategy and our collaboration with Nasdaq Dubai will play an important role in our activities across the region,” he added.

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