TASI Between: openness & hedging

After the first stage of the Saudi market’s joining the FTSE Russell index and Morgan Stanley capital International (MSCI) index, the Saudi market witnessed historical levels of cash flows reaching 20 billion rials, making the Saudi market a significant player in the emerging financial market. This makes it more vulnerable to global crises than it did before.

I think it is time to talk about enabling hedging tools and making them available to investors and licensees, to limit the impact of investors and try to rein in hot money. Future contracts, options contracts, and more are designed to reduce price volatility and exit crises with minimal damage.

It should be noted that hedging instruments are subject to legal adaptation to the nature of Saudi regimes, particularly with regard to estoppel; technology has helped to overcome many legal obstacles.

The TRA has made a significant effort to meet the requirements for joining the global indicators of FTSE and Morgan Stanley, and I hope that much will be done to hedge against and develop control mechanisms to reduce market crime, where it is often difficult to prove.

Although the Saudi market has reached emerging markets late, past market experiences are available to benefit from them.