DUBAI: The Saudi Stock Exchange has taken a major step toward transforming its financial infrastructure after signing a deal with Nasdaq, the US market based in New York.
Tadawul, the Riyadh-based market, on Monday announced an agreement with the US group to upgrade its post-trade technology, including registry, depository and risk-management systems, to be completed by the second half of 2020.
Nasdaq will deliver new cash and derivatives clearing systems, in a bid to bring the Riyadh exchange into line with global best practice in securities trading, according to a joint statement about the planned “transformation” at the Tadawul.
“We are very keen on investing in cutting-edge technologies to offer a fast and efficient post trade platform,” said Tadawul CEO Khalid Abdullah Al-Hussan.
“This crucial step goes hand in hand with all the market enhancements we have undertaken to integrate securities trading in Saudi Arabia with global equity markets and enhance post-trade infrastructure and efficiency for local and foreign investors.”
Tadawul has embarked on a strategy to modernize the infrastructure of the Arabian Gulf’s biggest stock market to enable it to handle the big economic changes planned under the Kingdom’s Vision 2030 strategy.
Proposed sales include the $100 billion initial public offering (IPO) of shares in the national oil champion Saudi Aramco, and a $200 billion sell-off of state-owned companies ranging from power generators to football clubs. At the Future Investment Initiative in Riyadh in October, Al-Hussan said he was confident Tadawul could list the Aramco IPO “exclusively” in Saudi Arabia.
Earlier this year, Tadawul announced major changes to its share trading regime, moving to the “T+2” settlement cycle used in most of the world, allowing foreign financial institutions to own shares directly in the Kingdom, and enabling “short selling” of shares.
Adena Friedman, president and chief executive of Nasdaq, said: “The ambition of Tadawul to become an innovative, world-leading exchange company is not only admirable but inspiring to our industry. By addressing the demand to overhaul, modernize and evolve its post-trade infrastructure, this demonstrates a clear vision by Tadawul to attract capital — both domestic and foreign — and present Riyadh as a major financial destination with best-in-class technology operating at its core. As a long-term partner, we are proud to be supporting Tadawul in their ambitious efforts and incredibly bright future.”
Securities industry experts welcomed the Tadawul-Nasdaq deal. Jeff Singer, former chief executive of Nasdaq Dubai and now a lecturer in business at the American University of Sharjah, said: “It’s a pretty big shift. They’ll need help from the experts at Nasdaq to reach their goal of looking like an international stock exchange. They will certainly need this kind of trading infrastructure to handle the volumes expected in the Aramco IPO and the rest of the privatization program.”
Oliver Schutzmann, chief executive of regional investor relations firm Iridium, said: “It’s good the Tadawul is getting ready for the investor revolution that is coming. The post-trade infrastructure is crucial for investors, long after the excitement of an IPO has faded.”
The new post-trade technology will replace Tadawul’s current systems, which were implemented in 2001.
In addition to introducing a new central counter-party clearing process, this transformation will enable both Tadawul and market participants to introduce new asset classes to the market and offer new services to the investors.
“These changes will increase efficiency, effectiveness and further growth of the market, supported by a modern flexible and efficient technology that reduces risks in the post-trade area in compliance with international best practices and standards,” Tadawul said in a statement. The deal also suggests that, in the debate over where the Aramco IPO should be listed in addition to Tadawul, Nasdaq has not given up hope in the face of competition from its rival New York Stock Exchange, as well as bourses in Hong Kong and London.
Some of the biggest companies in the world, including Apple, Microsoft, Facebook and Google owner Alphabet are listed on Nasdaq, though most big oil companies are listed on NYSE.
President Donald Trump hinted last month at ongoing interest by Nasdaq in the Aramco listing when he told journalists on board Air Force One: “I want (Aramco) to very strongly consider the New York Stock Exchange or Nasdaq or frankly anybody else located in (the US).”
Tadawul hires Nasdaq for tech ‘transformation’
Tadawul hires Nasdaq for tech ‘transformation’
SFD, AfDB sign deal to finance development initiatives in Africa
RIYADH: Developing African countries are poised to receive a funding boost for growth initiatives following a deal with the Saudi Fund for Development, aiming to foster sustainable progress.
The memorandum of understanding, signed with the African Development Bank Group, aims to promote mutual objectives and activities for sustainable international development between the two parties, the Saudi Press Agency reported.
This initiative aligns with SFD’s objective to enhance both social and economic growth by creating diverse opportunities.
Moreover, the newly signed agreement aims to facilitate the exchange of knowledge and experiences while advocating for optimal co-financing strategies. It will also support the attainment of sustainable development goals and optimize the impact of these initiatives.
Additionally, the MoU also aims to enhance collaboration in pursuit of shared goals that promote the expansion of crucial opportunities in diverse beneficiary African nations, ultimately contributing to global prosperity for the most impoverished and least developed communities.
Saudi Central Bank and BIS co-host meeting on reserve management in Riyadh
RIYADH: The evolving global landscape presents new challenges and opportunities for central bank reserve managers, the governor of Saudi Arabia’s apex financial institution explained at a high-level meeting.
Speaking at an event in Riyadh which was attended by the Bank for International Settlements, Ayman Al-Sayari set out his view on the complexities of the current macro-financial environment.
The two-day gathering, which began on April 28, brought together reserve managers and experts from central banks in the Middle East and North Africa region, as well as participants from other apex financial institutions, to discuss the latest trends in managing foreign exchange reserves.
The event served as a platform for participants to exchange insights, perspectives and expertise on the most critical aspects of reserve management through a series of panel discussions and keynote speeches.
In March, SAMA’s monthly statistics bulletin revealed that foreign assets of Saudi Arabia’s commercial banks surged by 22 percent in February, reaching a total of SR347.63 billion ($92.7 billion) compared to the same month of the previous year.
This rise reflects a significant expansion in the commercial institutions’ international holdings and investments.
The central bank added that its net foreign assets reached SR1.55 trillion in February.
Central banks’ foreign holdings are primarily for reserve management and monetary policy purposes, while commercial banks’ foreign assets are for business operations, customer services, and investment activities.
The report added that Saudi Arabia’s total reserve holdings amounted to SR1.62 trillion, representing a five percent decline compared to the same month of 2023.
DIFC records $2.6bn in gross written premiums, highest figure in its 20-year history
RIYADH: Dubai International Financial Centre recorded its highest gross written premiums in its 20-year history, amounting to $2.6 billion in 2023, marking a 23 percent increase from the previous year.
DIFC, a global financial center in the Middle East, Africa, and South Asia region, connects the fast-growing markets of the region with global economies and offers dining, retail, and living amenities, according to its website.
The center also recorded a 20 percent increase in the registration of insurance and reinsurance firms, including the first move of a Guernsey-based captive.
The Emirates News Agency reported that DIFC “has consolidated its position as the principal hub for the (re)insurance industry,” adding that DIFC’s appeal for managing general agents, representing 43 percent of new registrations, is a major factor shaping its insurance landscape.
This is credited to the center’s well-established regulatory framework, facilitating partnerships with cedants and brokers.
The influx of global insurers, reinsurers, and brokers, as well as captives, MGAs, and other industry stakeholders into DIFC, is driven by several factors. These include buoyant oil prices and increased infrastructure spending, as well as a focus on sustainable projects and low insurance penetration in the region.
Among the notable entities to join DIFC’s insurance sector in the past year are Alif Limited, Arc Insurance and Reinsurance Limited, and Barents Risk Management Limited. Joining them are BharatRe Global Ltd. and many more, it added.
Arif Amiri, CEO of DIFC Authority, emphasized the center’s role as a global industry hub, hosting over 120 registered insurers, reinsurers, captives, MGAs, and related entities.
The significance of DIFC’s stature in the insurance domain is further underscored by its co-hosting of the Dubai World Insurance Congress, featuring discussions on key themes reshaping the industry’s future, including innovation, capital attraction, and talent development.
In 2023, a survey conducted at DWIC revealed an 87 percent confidence in the Middle East, Africa, and Southern Asia market’s strategic opportunities. Property, health, energy, cyber, and liability lines of business were identified as holding the most potential. The survey also highlighted an 85 percent confidence rate in renewals and client retention.
Over two decades, DIFC has fostered the growth of the insurance and reinsurance industry, attracting talent and expertise to access key markets in the Middle East, Asia, and Africa.
The center hosts major insurance brokers, five of which are top ranked by the specialized insurance credit rating agency, AM Best. This has contributed to a significant 61 percent increase in brokered premiums compared to 2022, surpassing the $2 billion mark and solidifying DIFC’s position as a global market for insurance and reinsurance placements.
Dubai Real Estate Brokers Program attracts 25 strategic partnerships
RIYADH: Dubai’s property market is set to grow, with the Real Estate Brokers Program securing 25 partnerships with brokerage companies and developers in the private sector.
According to a press statement, the first phase of the program, launched in mid-March and headed by the Dubai Land Department, also received over 1,000 registrations from Emirati citizens.
Dubai Real Estate Brokers Program aims to increase the proportion of citizen brokers from 5 percent to 15 percent over the next three years to enhance the participation of young citizens in the Emirate’s developmental initiatives across various key sectors.
“This reflects the early positive impact of the program, showcasing citizens’ aspirations and eagerness to engage as real estate brokers and acknowledging the pivotal role of Dubai’s real estate sector locally and globally,” said Marwan bin Ghalita, acting director general of Dubai Land Department.
The initiative also aligns with Dubai Social Agenda 33, which seeks to triple the number of Emiratis working in the private sector.
Ghalita added that the program will help young talents in the nation enhance their productivity, therefore contributing to Dubai’s economic growth.
“Dubai consistently offers outstanding examples of collaboration and synergy between the private and public sectors,” said Ghalita.
He added: “With the program’s enrollment exceeding 1,000 citizens and real estate companies continuing to join the strategic alliance within a short period, we are diligently working toward achieving all the ambitious goals of the Dubai Real Estate Brokers Programme. In particular, Emirati real estate brokers will increase from 5 percent to 15 percent over the next three years.”
The program also encompasses additional initiatives, including Emirati real estate broker licensing, encouraging property developers to allocate a portion of their sales to local agents, and empowering citizens in the property sector.
Under the partnership with the private sector, citizen participants will receive various support packages to enhance the competitive edge of UAE people and enable them to take up roles in the real estate sector.
The press statement added that efforts would also be made to allocate 10 percent to 15 percent of the development company’s sales to be marketed by Emirati real estate brokers, therefore contributing to the empowerment of national citizens by offering them employment opportunities in the property market.
Dubai ruler approves new $35bn airport terminal
CAIRO: Dubai’s ruler Sheikh Mohammed bin Rashid Al-Maktoum approved a new passenger terminal in Al Maktoum International airport worth 128 billion dirhams ($34.85 billion), he said on Sunday in a post on X.
The Al Maktoum International Airport will be the largest in the world with a capacity of up to 260 million passengers, and five times the size of Dubai International Airport, he added, saying that all operations at Dubai airport would be transferred to Al Maktoum in the coming years.
The Al Maktoum airport will also include 400 terminal gates and five runways, he said.
The airport will be the new home of flagship carrier Emirates and its sister low-cost airline Flydubai along with all airline partners connecting the world to and from Dubai, Dubai state-owned airline Emirates chairman Sheikh Ahmed bin Saeed Al-Maktoum said.
The move “further solidifies Dubai’s position as a leading aviation hub on the world stage,” the CEO of Dubai Airports, Paul Griffiths, was quoted as saying by the Dubai Media Office.
