Saudi Exchange unveils new instrument to trade global shares locally
The Saudi Exchange on July 7 launched its first Saudi Depositary Receipts, allowing international equities to be traded locally in Saudi riyals.
The move marks the debut of depositary receipts in the Kingdom's financial market and is seen as a strategic leap toward reinforcing Riyadh's position as a global financial center, in line with the Financial Sector Development Program and broader Vision 2030 ambitions.
In a release, Tadawul stated: 'SDRs are highly liquid and flexible, enabling issuers to transfer securities between the Saudi financial market and foreign markets by converting the SDRs into shares in the foreign market, thus enabling the company's shares to be traded on two different financial markets.'
It described the launch as 'a pivotal step toward consolidating the Kingdom's position as a global financial center.'
This development is not merely a technical upgrade; it reflects a broader strategic effort to modernize and globalize Saudi Arabia's capital markets.
Since the launch of Tadawul Group's post-initial public offering transformation, the Kingdom has introduced a series of reforms aimed at enhancing market sophistication and accessibility.
These include inclusion in global emerging market indices such as MSCI, FTSE, and S&P Dow Jones; the rollout of derivatives trading; the simplification of Qualified Foreign Investor frameworks; and the acceleration of sector-diverse IPO pipelines.
The introduction of SDRs builds on this momentum by bridging local and international investment landscapes — effectively bringing Wall Street- or London-listed equities to Riyadh's trading screens.
What are SDRs and why do they matter?
A depositary receipt is a financial instrument that represents shares in a foreign company but is traded on a local exchange in the domestic currency.
In the case of SDRs, this means investors in the Kingdom can gain exposure to foreign firms — such as global technology giants, industrial leaders, or energy companies — without needing to open a brokerage account abroad.
Unlike traditional cross-border investing, SDRs enable seamless trading, clearing, and settlement through Tadawul, all denominated in Saudi riyals.
This makes it easier for local investors to access global markets. They can buy international shares through a familiar domestic platform and trade using local brokers. It also helps them diversify their portfolios without dealing with foreign accounts. Most importantly, they remain under the protection of Saudi Arabia's legal and regulatory framework.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
an hour ago
- Arab News
Saudi Arabia issues over 1,300 new industrial licenses in 2024: Ministry report
RIYADH: Saudi Arabia has issued 1,346 new industrial licenses in 2024, attracting over SR50 billion ($13.3 billion) in new investments, a recent report revealed. Private sector investments in industrial cities and zones totaled SR1.9 trillion, and the number of licensed workers in the field was 1.09 million, with a 36 percent Saudization rate, the analysis by the Kingdom's Ministry of Industry and Mineral Resources said. The new figures are consistent with the nation's efforts to transform its industrial sector to boost the number of factories to 36,000 by 2035, of which 4,000 will be fully automated. The goal is part of the Kingdom's strategy to foster a dynamic, innovation-driven industrial sector. They also align with data from January, when the country's industrial production index rose by 1.3 percent year-on-year, driven by ongoing growth in manufacturing and waste management, according to the General Authority for Statistics. Monthly, the index remained stable at 103.9, unchanged from December. 'We have all the capabilities to achieve a competitive and sustainable industrial economy, including ambitious young talent, a distinguished geographical location, rich natural resources, and leading national industrial companies,' the report said, citing Crown Prince Mohammed bin Salman. 'Through the National Industrial Strategy and in partnership with the private sector, the Kingdom will become a leading industrial power, contributing to securing global supply chains and exporting high-tech products to the world,' he added. The ministry has also developed 454 investment opportunities worth SR143 billion, which are linked to the industrial sectors targeted in the National Industrial Strategy. The report shed light on how Saudi Arabia has achieved a global ranking of 33 in the Competitive Industrial Production Index. 'This progress reflects the Kingdom's significant efforts to strengthen its industrial sector as part of Saudi Vision 2030, which aims to diversify the economy and reduce dependence on oil. This achievement also represents an advance of two places from the target, which is 35th place globally,' the Minister of Industry and Mineral Resources, Bandar Alkhorayef, said. 'These visions and objectives set forth major ambitions to align with the Kingdom's position as an influential regional power within the G20 group and achieve Saudi Arabia 2030, which envisions the Kingdom as a leading industrial nation in which the mining sector is the third pillar of the national economy,' Alkhorayef added. In June, Saudi Arabia launched the second phase of its standardized industrial incentives program to enhance competitiveness and strengthen the Kingdom's trade balance. Speaking at the Saudi Industry Forum in Dhahran at the time, Khalil Ibn Salamah, deputy minister of industry and mineral resources for industrial affairs, said the initiative supports the government's efforts to drive high-value investments in priority sectors. This comes as the nation works to position itself as a regional and global industrial hub. Since its initial launch, the program has drawn more than 1,000. Of the 118 applications received, 12 have reached the final qualification stage.
Al Arabiya
an hour ago
- Al Arabiya
Saudi firms sign $8.3 billion clean energy deals
Several Saudi companies, including utilities heavyweight ACWA Power and a subsidiary of Aramco, signed power purchase agreements on Sunday for clean energy projects with a capacity of 15 gigawatts and investments worth around $8.3 billion, the Saudi state news agency (SPA) said. ACWA Power signed seven agreements as the main developer, in partnership with the Water and Electricity Holding Co (Badeel), owned by the Saudi Public Investment Fund (PIF), and Aramco Power, a unit of Aramco, according to SPA. The projects include five photovoltaic solar plants in the cities of Aseer, Medina, Mecca and Riyadh, and two wind power projects in Riyadh. Saudi Arabia is aiming to build up to 130 gigawatts of renewable capacity by 2030, it said last year.
Arab News
an hour ago
- Arab News
STC Bank launches new savings product ‘Numu+'
STC Bank has launched a unique savings product — 'Numu+' — which will encourage customers to save through an innovative concept. It includes valuable rewards and gifts, such as luxury cars, cash, and electronic devices, offered by the bank as an incentive to grow their personal savings. 'Numu+' was primarily designed as an account that enables customers to save through a unique experience via the bank's app. The product is in line with Vision 2030, specifically the Financial Sector Development Program, and the goal of raising the savings rate across the Kingdom from six to 10 percent. It also continues STC Bank's efforts to introduce innovative digital products that enhance the financial solvency of various customer segments. STC Bank's continued growth is driven by its customer-centric digital financial services platform, which allows individual users to open a bank account with an IBAN number. This allows customers to enjoy a host of benefits, including the 'Numu+' savings service, instant local and international transfers at competitive rates via mobile numbers, card services, an online store, expense monitoring and financial planning features, and other daily financial transactions, all of which have become easier than ever before.
