CME-1 Equity Markets

Question 1

What is the main stock exchange in Saudi Arabia?

Accepted Answer

Saudi Exchange (Tadawul)

Answer

The Saudi Exchange (Tadawul) is the sole authorized stock exchange in Saudi Arabia. It was formally established as a joint-stock company in 2007 and is one of the largest exchanges in the Middle East by market capitalization.

Question 2

What is Nomu, the parallel market on Tadawul, primarily designed for?

Accepted Answer

Small and medium enterprises (SMEs) seeking lighter listing requirements

Answer

Nomu is a parallel equity market with lighter listing requirements designed to provide SMEs with an opportunity to access capital markets. It has lower minimum capital, free float, and track record requirements compared to the Main Market.

Question 3

What is the settlement cycle for equity trades on Tadawul?

Accepted Answer

T+2

Answer

Tadawul operates on a T+2 settlement cycle for equity trades, meaning the transfer of securities and payment occurs two business days after the trade date. This aligns with international standards.

Question 4

What is the daily price fluctuation limit for stocks on the Main Market of Tadawul?

Accepted Answer

10% up or down

Answer

Stocks on the Main Market of Tadawul have a daily price fluctuation limit of ±10% from the previous day's closing price. This circuit breaker mechanism helps prevent extreme volatility.

Question 5

Under the Qualified Foreign Investor (QFI) program, what is the maximum ownership limit for a single foreign investor in a listed Saudi company?

Accepted Answer

10% of the company's shares

Answer

A single QFI can own up to 10% of a listed company's shares. The total foreign ownership limit (including swap agreements and QFIs) is 49% unless the company's articles specify a lower limit.

CME-1 Practice Test

CME-1 Practice Test

CME-1 Equity Markets