Saudi trading system gets off the ground

(Getty Images)

The Saudi stock exchange said it successfully launched a new trading system on Saturday designed to enhance market transparency and efficiency.

"The Saudi stock market has successfully operated the new trading system with all the operations and the transactions of the first day," Tadawul said in a statement.

The system was developed by Nordic bourse operator and technology group OMX for 160 million riyals ($42.7 million). Its launch has been delayed by five months.

Remarks by Capital Market Authority (CMA) chief in April that the system would be launched in May have contributed to a decline in the bourse, which has been criticised by foreign investors as being poorly regulated, analysts said.

The system's maiden trading day saw the Arab world's largest bourse register its biggest one-day gain in more than 15 weeks amid hopes of healthy third-quarter earnings.

The system includes platforms for trading and market data dissemination - a market surveillance system.

Plans to build the system were announced at the height of a crash that wiped off more than half of the market capitalisation in 2006.

The crash was sparked by CMA sanctions against some major speculators in February last year at a time when prices reached stellar valuation ratios.

CMA chief Abdulrahman al-Tuwaijri has said the system would enhance transparency and cater for a phenomenal surge in the number of retail investors on the back of abundant liquidity and the rush for quick profit in the market.

Market liquidity had risen more than five-fold between 2002 and February 2006 and the count of retail investors was 4 million in 2006 compared to 50,000 in 2002.

The new system, which can handle 2 million deals per day, will boost speed of processing transactions, according to al-Watan newspaper.

On its first day, it processed 148,697 transactions.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM