The Saudi Tadawul Stock Exchange is launching Saturday the Sukuk and Bonds Market following the completion of preparations conducted with brokerage firms and information providers. Tadawul Director of Monetary Trading Waleed Al-Bawaradi said that the issue of foreigners investing in the market was being studied, with non-Saudi nationals currently only permitted to invest via Saudi intermediaries. The trading of Sukuk and bonds will be conducted through stock market brokers to facilitate investor transactions and the diversification of investments. Trading in the new market will begin at 11.30 A.M. and cease at 3 P.M. each day, with submitted orders executed after a period of two days. The Capital Market Authority (CMA) has conducted training for a large number of brokers in the new market system and developed Tadawul's supervision of the system. Information on listed bonds is available at the Tadawul website. The new market is regarded as an important financing channel by which governments and private firms can provide the liquidity needed to finance projects at a relatively low cost. It also protects investor portfolios and enables the diversification of investments. Some traders fear, however, that daily liquidity in the stock market will be removed or transferred to the Sukuk and Bonds market, a suspicion some say was confirmed by a decline in stock market trading volume from SR11 billion to SR6 billion during the last day's trading session.
