There is only one stock market in Saudi Arabia and it is called the Saudi Stock Exchange Market or the Tadawul. The Tadawul is under the supervision of the Capital Market Authority or CMA of Saudi Arabia. The CMA is the governmental institution which is controlling all the Saudi Arabian markets for capital. The authority is independent financially, legally and administratively. It must however report to the Prime Minister.
The components of the Tadawul
Origin The Tadawul was established back in the 1930s. As of 15 August 2010, the Tadawul was listing 144 companies which are publicly traded. The companies listed on the Tadawul are active in the following fields: - Banking and Financial services - Petrochemical Industries - Cement and Retail - Energy and Utilities - Agriculture and Food Industries - Telecommunication and IT - Insurance - Multi investments - Industrial Investment - Business and Construction - Real Estate and Property Development - Transport - Media and Publishing - Hotel and Tourism
The Saudi Stock Market: The objectives
The Tadawul has five main objectives: The first one is to operate the stock exchange market efficiently. The second one is delivering quality services. The third one is to ensure that all stock market activities are carried out with the most fairness and integrity. The fourth objective is to develop the capabilities of the exchange market. The fifth objective is to support investments in a competitive environment in order to develop strong financial exchanges.
The Tadawul: Trading sessions
A market day opens at 10am and closes at 4.30pm. It is also divided into three periods called trading sessions.
First session The first session opens at 10am and closes at 11am and it is called the pre-open or the Open-Order Maintenance (orders can be ordered, amended and cancelled; the first five prices are displayed).
Second session The second trading session starts at 11am and ends at 3.30pm and it is called Open-Trading (orders can be ordered, amended, cancelled and maintained; the first ten prices are displayed).
Third session The third session starts at 3.30pm and ends at 4.30pm and it is called the Pre-Close (prices can not changed, orders cannot be placed, and quantities can only be decreased).
The Tadawul New Trading System
In 2006, the Saudi Stock Market signed a contract with a new provider of stock exchange technologies, OMX, in order to achieve a new system. The new system is designed to allow unlimited number of brokerage companies to trade, improve the quality of stock market watch, improve transparency to the market depth, and implement controls against manipulation of the market. The system covers trading, depository, registry and other aspects. It supports the trading of new products as well.