RIYADH: SNB Capital has been given the go-ahead by Saudi Exchange Co. to conduct market-making activities related to oil giant Saudi Aramco.
According to the firm, market makers are exchange members who ensure the availability of liquidity for a listed security by continuously quoting buy and sell orders while a market is open.
This helps boost trading activity and combats dramatic price changes.
In a release, the exchange said the market maker obligations on Aramco are an 80 percent minimum presence of orders, with a minimum size of SR500k ($133,353). The minimum spread is 0.3 percent.
The activity will begin on Aug. 1.
SNB Capital joined Saudi Exchange’s market-making framework in February, and in an interview with Arab News that same month, the firm’s Head of Securities Loai Bafaqeeh said such a move was a crucial step to ensure a good level of liquidity in the Kingdom’s stock exchange.
“At SNB Capital, we believe that we need to be ahead of the game. Market making is extremely important to ensure a good level of liquidity when it comes to equity or derivatives,” said Bafeeqah at the time.
He added: “I believe we were one of the few who signed (a market-making deal with Saudi Exchange) and the only one who will be offering both the equity part and the derivatives. And, we believe the opportunity, when it comes to securing this type of liquidity on derivatives will be even more important.”
Apart from SNB Capital, Al Rajhi Capital and Riyad Capital also joined the market-making framework, an initiative that was launched in December 2022 to help ensure liquidity and raise price-determination efficiency.
During the same interview with Arab News in February, Bafaqeeh described SNB Capital as being unique as it offers “market making on your terms.”
“If you want us to do market making for you, we will be able to do that. If you want to manage how you are going to put the orders, we can enable it for you. Also, we can work with a third party that we can assign for market making, in case the client prefers,” he said.
