The debut by Aramco IPO on Tadawul, stock exchange increased the country’s market capitalization by >300% thereby making itself the 9th largest stock exchange in the world. This also pushed the TASI index by ~4% (Q3 2019 to Q4 2019) to reach a level of 8,389.2 points.
Figure: Value Traded
fluctuations corresponding to TASI Index fluctuations
With limited financial awareness & limited opportunities, the participation in equity market has been dominated by institutional investments for a long time. It was observed that up until Quarter 3 of 2019, the retail participation was quiet stagnant with a growth rate of mere 0-1%. However, post launch of Aramco the market saw a sudden surge in the retail participation level. Aramco has been one of the world’s most profitable company for many years. It was years of trust instilled in the company that bought many first time investors to invest in the market. Owing to its global image, the company expected large foreign investments as well. But the global investors always held their concerns regarding company’s transparency towards its reporting & valuation. Therefore, the foreign investor participation did not meet the expected level.
The onset
of COVID 19 pandemic placed the world under a lockdown the economies around the
world suffered losses & stock exchanges started hitting their decade lows.
This was further supplemented by dropping oil prices as the demand for oil
drastically reduced across the globe. While some investors exited the market
some investors stayed with the perspective of making long term profits as well.
The brokerages saw an increase in number of account openings dominated by
retail participants who wanted to benefit from prevailing low prices. Top
Brokerage firms witnessed a growth in monthly account opening rates around
30-40% higher compared to pre-COVID levels.
Being the
largest exchange in Middle Eastern region, Tadawul lacked in offering
diversification options. It was recently in July 2020, it launched trading of
derivatives for the first time starting off with futures trading. This has been
acting as a supplementary attraction factor to many retail participants. In
order to make Tadawul a complete trading ecosystem, the government is expected
to soon launch trading of options and commodities as well. Therefore in such
scenario we can expect the retail participation to increase from 22% (Q3’19) to
~24% (end of 2020).
Companies Covered:-
Al Rajhi Capital
NCB Capital
Aljazira Capital
Samba Capital
Saudi Fransi Capital
Derayah Capital
Riyad Capital
HSBC Saudi Arabia
Alistithmar Capital
ANB Invest
Albilad Investment
Alinma Investment
EFG Herms Saudi Arabia
Merrill Lynch KSA Co.
Falcom Financial Services
Morgan Stanley
Alawwal Invest
Deutsche Securities Saudi Arabia
Al Khair Capital
Jadwa Investment
Arbah Capital
Emirates NBD Capital
Audi Capital
GIB Capital
Citigroup Saudi Arabia
Time
Period Captured in the Report:-
Historical
Period: 2015–2019
Forecast
Period: 2020-2024
For
More Information on the research report, refer to below link:-
KSA Financial Brokerages Market
Related Reports:-
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249
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