Tadawul to apply ‘Market Making’ Program by H1-end, says CEO

The Saudi Stock Exchange (Tadawul) will implement the Market Making (MM) Program by the end of H1 2018, in addition to restructuring the market fees to boost liquidity, Al-Eqtisadiah newspaper reported, citing Khalid Al Hussan, Tadawul’s chief executive officer.

Al Hussan added that Tadawul is working with the Capital Market Authority (CMA) to find the appropriate legislation system, such as the rules of listing and offering, as well as further developing the market.

Argaam previously reported that Tadawul will implement the Market Making (MM) Program based on global best practices to boost liquidity, facilitate orderly price formation, fortify the sukuk, bond and ETF markets and pave the way for ETPs and derivatives.

“The cumulative impact of these measures will be a more efficient, liquid and secure market for investors and intermediaries that is further aligned to international best practices,” Al Hussan mentioned earlier.

Tadawul is currently taking all measures necessary for the planned initial public offering (IPO) of oil giant Saudi Aramco, set to take place by the end of this year.

The MM Program aims to find balance between supply and demand, and narrow the gap between the selling and buying prices. In cases where there’s selling pressure by market traders, the Market Making Program can step in to provide purchase orders, allowing the traders to sell their stock easily without changing the downward trend of the shares due to selling, and vice versa.