A cautious response greeted the launch of the new Saudi stock market, Tadawul, on 6 October. The new system allows for more open and flexible trading, with a greater variety of trading orders and a range of different services for brokers. Tadawul was launched without any technical hitches, but initial trading was slow as brokers got to grips with the new system (MEED 5:10:01).
'In the long term, Tadawul is far superior to the system it replaces,' says Mazen Hassouneh, managing director of the local Rana Investment Corporation. 'But trading has been very thin since it was introduced, with just 47,000 shares traded on 6 October. This is due to temporary teething problems as traders learn how the new system works.'
The Saudi Arabian Monetary Agency (SAMA - central bank) acknowledges the early problems but says trading volumes are picking up. 'The launch was fine as a starting point but people were very cautious,' says Musaed al-Nemer, head of external relations for Tadawul at SAMA. 'However, trading volumes are increasing day after day and will soon be double the volume on the opening day. We're technically very pleased with the system, which has proved stable.' Al-Nemer says the onset of US strikes against Afghanistan on 7 October also caused market caution.
The Tadawul website, www.tadawul.com.sa, was a confirmed success with more than 600,000 visits on 6 October alone. The high volume of traffic on the site caused some limited problems, but these were soon solved and the site's traffic capacity expanded.
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