The Saudi Stock Exchange, or Tadawul, is set to introduce an index futures product in a bid to attract more foreign investors.
The Saudi Futures 30 (SF30) is an exchange-traded derivative and will begin trading on August 30.
It is based on the MSCI Tadawul 30 Index which was introduced last year following the country’s inclusion in emerging market indices from MSCI and FTSE, a move which has led to greater interest in Saudi stocks from international fund managers.
According to Tadawul chief executive, Khalid Al Hussan, the SF30 will provide investors with more hedging tools as well as granting more exposure to the Saudi capital market.
"The launch of the derivatives market in Saudi Arabia as one of the Financial Sector Development Program (FSDP) key initiatives under the Saudi Vision 2030 is a significant step in introducing sophisticated market products and creating a trading environment attractive to local as well as international hedgers and traders," he said.
Tadawul also has plans to roll out further derivatives products such as single stock futures, single stock options and index options.
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