RIYADH: SNB Capital, which joined Saudi Stock Exchange’s market-making framework on Feb. 12, considers it a crucial step to ensure a good level of liquidity in the Kingdom’s market, according to a top official.
Speaking exclusively to Arab News on the sidelines of the Capital Market Forum in Riyadh on Monday, Loai Bafaqeeh, head of Securities at SNB Capital, said that Saudi Arabia’s equity market is going in the right direction, and will emerge as one of the best markets globally.
“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.
He added: “I believe we were one of the few who signed (market-making deal with the 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.
“At SNB Capital, I think, the unique offering that we will be having is market making on your terms, i.e, 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.
Bafaqeeh added that market making does not influence the price of the stock, as it just “provides liquidity for people, in order to get, in and out or adjust their positions on the holdings.”
He noted that Saudi Arabia’s equity market is going in the right direction, driven by promising regulatory frameworks and a healthy technology platform.
“We are encouraging more international visitors to come to the Saudi market. And as a sign of that, you see that the international contribution, in terms of value traded in Saudi Arabia grew from 5 percent to 20 percent in the last three or four months. This is a clear indication that we are on the right track internationally,” he added.
Bafeeqah said that the Saudi market will see more initial public offerings in the future and added that both the equity and fixed-income markets will witness rapid growth in the Kingdom.
He lauded Saudi Arabia’s Capital Market Authority for providing the proper regulatory framework to help capital and equity markets grow and prosper.
“Honestly, I think we are extremely lucky. With the CMA, we see that they are looking into all other opportunities that we want to introduce. We want the market, in three years, to be one of the developed markets and we are taking bold steps toward that. So, we see that the CMA is playing a massive role, which is super important to enable this opportunity for us,” said Bafeeqah.
The official further added that technology is helping SNB Capital to offer more products and services.
“I would say technology is helping us. For example, we are the only capital (firm) that is offering a mobile application that gives you access to the equity market, to sukuk and bonds, and on top of that to mutual funds,” he concluded.
