RIYADH: Saudi Arabia’s stock exchange is planning to launch single stock option by the second quarter of 2022, as the Kingdom steadily evolves as a global financial hub, in line with the goals outlined in Vision 2030, according to Mohammed Al-Rumaih, CEO of the Saudi Exchange.
Speaking at the Saudi Capital Market Forum in Riyadh on Sunday, Al-Rumaih noted that the Saudi exchange is eager to find new and innovative ways to serve as a cornerstone of the Kingdom’s economic development.
“We are planning to launch single stock option in the second quarter, American style, physically settled, subject to regulatory approvals,” said Al-Rumaih.
It should be noted that single stock call options are physically settled derivatives. This gives the buyer the right, but not the obligation, during the fixed period stated in the contractual terms, to buy a specified amount of the underlying asset at a pre-determined strike price.
During the talk, Al-Rumaih noted that environment, social and governance principles are very strategic to the exchange, and noted that this area has witnessed the best growth in 2022.
“ESG is very strategic to us. This is one of the areas that have witnessed the best growth. As an exchange, we have the responsibility. We launched the ESG guidelines in 2021. ESG disclosure rate doubled in 2022 to 21 percent, compared to 8 percent in 2021,” said Al-Rumaih.
He further pointed out that the Saudi exchange expects 30 percent of the listed companies to do ESG disclosure in 2023.
Al-Rumaih also outlined the progress made by the bourse in the recent years, and added that it is one of the top-10 exchanges in the world.
“Our goal was to become one of the top-10 exchanges in the world. We have heard a lot of skeptics saying that we will not be one of the top-10. But today, Saudi exchange is one of the top-10 globally, the top 3 in emerging markets, and number one in MENA, GCC, and Europe in terms of IPO proceeds in 2022,” said Al-Rumaih.
He added: “In 2018, the market cap (of the main market) was SR1.8 trillion, but today it is SR10 trillion. The number of listed companies in the main market went up from 190 to 223 during the same period.”
Al-Rumaih went on and said that the number of companies in the Nomu market went up from 10 in 2018 to 46 in 2022, and today it is 49.
Talking about the number of investors in Saudi Arabia’s exchange, Al-Rumaih said, “The number of investors in Saudi Arabia’s main market in 2018 was 2.2 million. It went up by 50 percent in 2022 to more than 3.3 million investors. In the Nomu market, the number of investors in 2018 was 775, and it is 9,447 at the end of 2022. The investors in the debt market went up from 62 in 2018 to 62,128 in 2022.”
