DUBAI: The Saudi Stock Exchange, Tadawul, enjoyed a surge in revenue and profit last year, boosted by increased interest by foreign institutIons, greater diversification of the range of services offered to investors and cost controls.
Tadawul yesterday published its annual report for 2017 — under the theme “expansion and diversification” — showing a 543 percent increase in net profits to SR130 million, on consolidated revenues 74 percent ahead at AR545.4 million.
Earnings before interest, tax, depreciation and amortization (ebitda) rose nearly 300 percent to SR72.5 million.
Sarah Al-Suhaimi, chairperson of the Tadawul board, called the year a “pivotal” one for the exchange’s long-term strategy.
“This was a year in which the Tadawul made important strides toward the achievement of its strategy for growth, and cemented its role at the heart of Saudi Arabia’s economy.
“The overall strategic aim of Tadawul is to become a widely recognized global exchange. To support this goal, we embarked on a comprehensive program to raise standards and achieve parity with our emerging market peers,” she added.
Tadawul is a key element of the Vision 2030 strategy to diversify the Saudi economy away from oil dependency.
“Tadawul’s core objectives stem from its role in the reform agenda. The exchange is central to the ‘economy’ pillar of the Vision, which aims to create a thriving economy through investing for the long-term, with diversification of income vital for its sustainability. The fast pace of reform is both inspiring and challenging, and we are committed to its successful delivery,” Al-Suhaimi said.
Khalid Al-Hussan, chief executive, said that the results confirmed Tadawul’s position as the leading stock market in the Arabian Gulf region, with a market capitalization three times greater than its nearest rival.
“Tadawul’s status as the leading regional exchange is demonstrated by the fact that 72 percent of the value traded across the Middle East and North Africa is carried out in Saudi Arabia,” he said.
Reforms set in place in 2017 enabled Tadawul to clinch three upgrades to “emerging market” status from global index providers this year.
“Our most important avenue for growth is globalization. Tadawul aims to become the first choice for investors seeking exposure to the assets of a rapidly growing region. This will be achieved by the exploitation of three key value drivers: the development of a diversified and integrated exchange; enabling and capitalizing on Saudi social and economic growth; and the delivery of a truly regional exchange platform,” Al-Hussan said.
Operational highlights of last year included spinning off the security and depository center (Edaa), the launch of the parallel equity market Noms, and the adoption of a new global industry classification standard.
Al-Hussan also underlined the adoption of new fee structure for trading, listing and membership; the transition to a T+2 settlement and clearing system; and the registration of government bonds enabling the development of a bigger debt market in the Kingdom.