Saudi Stock Market
According historical notes, the first stock market company in Saudi Arabia was established in the 3rd decade of the 20th century. Nevertheless, stock trading was initiated only by the end of the 90s/ as a result, a significant increase in the number of stock exchanges was observed. In 1984 stock companies were allowed to regulate stock trading themselves through local banks and to forge panel for supervising market. In the beginning, the stock market was regulated by the Minister of Finance and the governor of Saudi Monetary Agency. Saudi Stock Exchange) Actually, the Saudi stock market has significantly developed over the last decade and nowadays Saudi Stock Exchange (Tadawul) is the largest in the Arab world. The capitalization of the stock exchange is amounted at $58 billion. Consequently, the increase in a number of joint stock companies trading shares is observed as well. So, the current position of the stock market is strengthening. About 70 firms and companies are listed on the stock Market.
Today, the Saudi Arabian Monetary Agency regulates the operation and trade of the stock market. Moreover, foreign investors are allowed to participate in the Saudi stock market through establishing mutual funds. (Saudi Stock Market) According official statistics, in 1997 the number of shares traded was amounted at 312. 4 million, and, thus, was valued at $16. 6 billion. In 1998 the total value of traded shares decreased because of significant fluctuations in the international stock markets and financial markets.
It was amounted only at 144. 3 million and valued at ?13. 6 billion. (Saudi Stock Market) To understand better the current position of Saudi stock market it is necessary to provide its financial summary:
- Value traded – 12,117,480,717. 00
- Traded volume – 288,915,237
- Trades – 242,096
- Symbols traded – 109
- Symbols up – 31
- Symbols down – 69 (Saudi Stock Exchange)
Speaking about the companies listed on the stock market it is necessary to outline the first ten companies:
- Saudi Kayan – 73,544,362
- Dar Al Arkan – 30,334,318
- Jabal Omar – 28,865,643
- Kingdom – 10,472,520
- Shipping – 10,007,032
- Saudi Electricity – 9,918,619
- Al Raiji – 9, 834, 346
- SABIC – 7, 768,456
- SPM – 6,593,6748
- RIBL – 5,379,256 (Saudi Stock Exchange)
Saudi stock market provides a wide range of activities and service such as, for example, opening accounts and depository at both the banks. Next, stock market offers support for full range of depository functions. For example, it is easy to pledge shares which are help in the depository.
When a bank reaches particular agreement with foreign or domestic investor, the details are automatically forwarded to the depository. The availability of shares is automatically validated by the tock market. Finally, Saudi stock market supports corporate actions. It means that instead of waiting for cheques it is possible to be paid directly into bank account. Summing, up Saudi stock market doesn’t take leading positions in the world yet, but it is swiftly developing. (Saudi Stock Exchange)
