Equity Markets Flashcards
6 cards from real CME-1 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Equity Markets flashcards as text
What is a Rights Issue (Haq Al-Awalawiya) in the Saudi capital market?
Answer: An offering of new shares to existing shareholders at a discounted price
A Rights Issue allows existing shareholders to purchase additional shares proportional to their current holdings at a discounted price. In Saudi Arabia, these rights are tradeable on Tadawul during the subscription period.
What is the minimum number of shareholders required for a company to list on the Main Market of Tadawul?
Answer: 200 shareholders
Companies seeking to list on the Main Market must have at least 200 public shareholders at the time of listing. This requirement ensures adequate distribution and liquidity of shares.
How are dividends typically distributed to shareholders of Saudi-listed companies?
Answer: Through the Tadawul Depository Center (Edaa)
Dividends are distributed through Edaa, the Securities Depository Center Company, which manages the deposit, transfer, settlement, clearing, and registry of securities ownership in Saudi Arabia.
What does the term 'Sukuk' refer to in the Saudi capital market?
Answer: Islamic financial certificates similar to bonds
Sukuk are Sharia-compliant financial certificates that represent ownership in an underlying asset, usufruct, or investment. They function similarly to bonds but comply with Islamic finance principles that prohibit interest (riba).
What is the role of the Listing Authority in Saudi Arabia?
Answer: It reviews and approves applications for listing securities on Tadawul
The CMA's Listing Authority is responsible for reviewing listing applications, ensuring compliance with listing rules, and approving or rejecting applications for listing on the Saudi Exchange.
What is the Saudi Exchange's pre-opening session used for?
Answer: Collecting orders to determine the opening price through an auction mechanism
The pre-opening session (8:00-10:00 AM) collects buy and sell orders to determine the opening price through a call auction mechanism. This helps establish a fair opening price based on supply and demand.
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