Foreigners snap up Saudi swaps

After a difficult start, international demand for swaps in Saudi Arabian stocks, first authorised by the country’s Capital Markets Authority last August, is finally starting to pick up – and fast.

According to the Tadawul, the country’s stock exchange, overseas-based investors bought SR1.23bn ($328m) worth of swaps last month, up more than three-fold from March, while only SR269m of them were sold.


Although only a minuscule part of trading on the Saudi stock exchange, this helped it gain nearly 20 per cent last month. Bankers and fund managers expect demand for swaps in Saudi Arabia to continue to grow, boosted by the positive earnings outlook for many Saudi companies.

“There has been a noticeable improvement in sentiment, and April was a very good month, the best since the swaps were introduced,” says Jamal Al Kishi, chief executive of Deutsche Securities Saudi Arabia. “If things continue to go as they have, May will be another good month.”