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2018
Highlights

It was a banner
year for Tadawul

Chairperson’s
statement

A giant leap
forward

Chief Executive Officer’s
Message

The
springboard
“ Investors, both local and foreign, play a crucial role in driving the market. However, investors need to be assured of the liquidity and the transparency of the market to be able to invest with confidence. ”

Three global stock index providers, MSCI, FTSE Russel, and S&P DJI announced upgrading Tadawul from watch list to emerging market status. The upgrade will become effective in 2019.

In addition to initiatives mentioned above, fails management controls were also introduced to deal with a situation where shares were not available to complete a sale.

Enhancements were made to the Independent Custody Model (ICM), which permits custodians A financial institution that holds customers securities for safeguarding to minimize the risk of their theft or loss. It can also be a clearing member for banks, corporations, foreign investors and institutional investors. They clear the trade by ensuring pay-in/pay-out of securities to hold shares on behalf of investors. The ICM Independent Custody Model enables custodians A financial institution that holds customers securities for safeguarding to minimize the risk of their theft or loss. It can also be a clearing member for banks, corporations, foreign investors and institutional investors. They clear the trade by ensuring pay-in/pay-out of securities to reject the settlement of unconfirmed trades. Securities borrowing and lending A collateralized loan of securities from one party (lender) of transaction to another party (borrower) was also introduced.

Building confidence

Since 2015, when the market was first opened to foreign investors, conditions relating to them have been modified twice. The following steps were taken to address any concerns of investors or index developers regarding the Saudi market:

  • Foreign investors were invited to gain first hand insights into the investment climate for themselves
  • The emerging market classification by the index providers was greatly influenced by the perceptions of international investors
  • The number of Qualified Foreign Investors (QFIs) grew from about 100 by over 300% over the year, and reached nearly 500
  • This was enabled by over 27 road shows and more than 40 meetings were held to attract foreign investors
  • Another major success was Goldman Sachs Saudi Arabia and GIB Capital joining Tadawul as members
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