Saudi Exchange prepares to launch a new generation of debt and derivatives products

21/11/2025 04:03 AST

The Saudi Stock Exchange is preparing to introduce a new generation of investment products, with a particular focus on debt instruments and derivatives, in line with the rapid development the market is witnessing, according to Khalid Al-Hussan, CEO of the Tadawul Group.

Al-Hussan told Asharq Bloomberg that the Saudi financial market is "going through the fastest stage of its development in decades," adding that it is "racing to innovate new products - from debt instruments to derivatives and data - in preparation for a digital expansion phase reliant on AI and blockchain."

Unprecedented market growth and listings
Over the past eight years, the Saudi stock market has seen significant growth, with the number of listed companies rising from 100 to over 380 today, across two markets with a total capitalization exceeding $2.5 trillion.

Al-Hussan explained that the market has undergone a transformation driven by several factors, most notably product expansion, listings, and capital formation.

He also noted that the amount raised through initial public offerings since 2018 has exceeded $130 billion, alongside developments in debt instruments, exchange-traded funds, and recently introduced derivatives.

He believes that the market is experiencing "significant changes and record foreign investor attraction," with foreign ownership rising to over $110 billion and more than 4,400 foreign investors registered.

Saudi market aligns with global standards
Regarding the readiness of the market for foreign investors, Al-Hussan emphasized that the true benchmark is alignment with global indices, emphasizing that "the main indicator is developing indices according to international standards."

The CEO added: "Today, the Saudi financial market is part of most global stock indices, and we have started a similar phase for debt instruments, which is the biggest proof of our standards aligning with investor expectations."

He added that international investors are "more comfortable than ever" with the quality of Saudi market regulations and technology.

He further highlighted that the Kingdom is opening the market to all resident and foreign investors without the need for a qualified investor framework - a "major" step that will attract more investment, increase liquidity, and deepen the market.

Three pillars of upcoming investment products
Al-Hussan revealed that the debt instruments market will be the first focus of upcoming product offerings, noting its importance for both the private and public sectors in capital formation and liquidity, adding that there are plans to develop the secondary market and increase trading depth in this sector.

The second focus is on derivatives, where significant changes, he added, are being made to the operational structure, and new instruments are expected to enhance stock market liquidity and expand hedging and diversification opportunities for investors.

According to Al-Hussan, the third focus is on data as a standalone investment asset. "We have invested heavily in data over the past two years. It is not just a revenue stream, but a key element in deepening the market," Al-Hussan said, adding that data "will become part of the global competition among financial markets."

Regarding technology, Al-Hussan disclosed that Tadawul established Wamid three years ago as its innovation arm in tech, stating: "Our priority is to be ready for any global changes. The company is studying AI, blockchain, digital assets, and machine learning."

He revealed that Wamid acquired Direct Financial Network Co., or DirectFN, and signed more than 13 tech agreements with international companies.

Market reflects the economy
Regarding the reflection of the economy on the market, the CEO of Tadawul disagrees with those who believe the market does not reflect economic prosperity: "The significant changes and the growth achieved are proof that it reflects the state of the Kingdom."

Al-Hussan sees Vision 2030 a turning point as the market capitalization "has increased significantly since the implementation of the Vision, not only due to rising prices but also because of the volume of issuances."

Al-Hussan also cited a statement by the CEO of MSCI, who said: "The Saudi market is the fastest market ever to be included in MSCI indices in its more than 20-year history."

Global flows to the Middle East
On global economic shifts, Al-Hussan said the world is undergoing a "major repositioning" of capital, adding: "Recently, we have seen important capital shifts toward the Middle East and Asia. There is growing demand from global funds seeking growth and stability."

He added: "Declining interest rates, the trade war truce, and shifting economic weight are all factors that enhance the Kingdom's attractiveness," he said, adding that there is "noticeable capital outflow from Europe to more dynamic emerging markets, with Saudi Arabia at the forefront."

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