Market Research

An examination of investment themes and stock market performance.

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    Mon, 27 March 2017

    The Saudi Parallel Market (Nomu)

    Although Saudi Arabia is the first country in the Gulf region to launch a parallel market, such markets have existed since the 1970s in many mature economies - US NASDAQ and the UK’s FTSE AIM are perhaps the best examples. That said, replicating the success of some of the more established parallel markets will not be easy. Jadwa Investment’s latest report takes a closer look at the Parallel Market and its impact on the Saudi economy.

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    Mon, 12 December 2016

    Real Estate Investment Traded Funds (REITs)

    Last month, another milestone in Saudi Arabia was achieved as the Capital Market Authority (CMA) approved a set of rules allowing the formation of Real Estate Investment Traded Funds (REITs) on the Saudi Stock Exchange (Tadawul). The introduction of REITs falls in line with the broader goals of the National Transformation Program (NTP) and Saudi Vision 2030. Besides diversifying the investment offering available within the Kingdom, REITs will also give investors much easier access to local real estate. This should bring about increased participation from the private sector which, in turn, will help stimulate the development of vacant land and raise the real estate sector’s contribution in overall GDP, a key target of the NTP.

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    Tue, 17 May 2016

    Recent CMA annoucements related to Tadawul

    A number of major developments have taken place in the Kingdom in the last few weeks underlining the government’s commitment to implementing structural economic reform. In April, we saw the unveiling of the Saudi Vision 2030 and, more recently, we saw major changes on a ministerial level. Packed in between all these announcements was an equally important but perhaps less publicized announcement by the Capital Market Authority (CMA), which will have a major impact on the Saudi Stock Exchange (Tadawul). Whilst some of these amendments focused on loosening previous rules on participation and ownership levels of qualified foreign institutional investors (QFIs), another strand of these reforms introduced new types of trading options and settlement processes, in line with international standards.

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    Wed, 06 April 2016

    The Saudi Stock Exchange (Tadawul) in 2016

    The Tadawul All Share Index (TASI) has dropped dramatically since mid-2015, making it one of the worst performing equity markets amongst major global and regional indices. Whilst the decline in oil prices has been an obvious factor in this fall, a number of other developments have played their part in dampening investor sentiment. In general, a deteriorating outlook over Chinese economic growth led to a reversal of portfolio equity flows from emerging markets. More specifically, the TASI suffered due to an escalation in regional political upheaval and energy price reform, whilst an overreaction by retail investors with short term investment horizons added to declines. Nevertheless, in recent weeks we have seen some tentative signs of recovery in the TASI. A mild improvement in oil prices and stability in global equity markets has afforded us an opportunity to be cautiously optimistic as we move forward. 

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    Mon, 29 June 2015

    Oil prices and the Saudi Stock Exchange (TADAWUL)

    With Saudi Arabia being a predominantly oil-based economy, major changes in the price of oil are likely to be followed by sentimental as well as real changes in the stock market. When a major downward movement in international oil prices occurs, this will usually be accompanied by an immediate/short-term impact on the stock market, as a result of change in sentiment. While sentimental changes often impact the stock market immediately, real changes will take effect over the longer term. If oil prices remain low, this ultimately affects economic policy framework, private sector activity and corporate profitability. The attached report examines the nature of the Tadawul All Share Index’s (TASI’s) relationship with global oil prices.

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