Nasdaq Dubai launches Saudi futures trading for investors

But the country of 33 million has seen drops in foreign direct investment (FDI) flows of late, something it needs for its ambitious Vision 2030 initiative to diversify the country’s economy and grow private sector jobs. Obstacles remain in the form of skills shortages and rising unemployment in the kingdom, as well as growing international concern over the unpredictability and repressive tactics of the kingdom’s powerful young crown prince, Mohammed bin Salman.

Ultimately, foreign investors “will continue to crave visibility, guidance and clarity that comes with a transparent and accountable operating environment in Saudi Arabia,” Ehsan Khoman, head of MENA research and strategy at bank MUFG, told CNBC via email.

“We’ll see positive results when those changes and reforms that Saudi intends to do materialize,” Nasdaq’s Ali said. “I think the decisive factor will be to what extent Saudi delivers on those reforms, because those can only bring positive change.”

Meanwhille, Talal Assad Touqan, head of research and advisory at Dubai-based Brokerage House Securities, doesn’t see negative press on Saudi Arabia dampening demand for the product, since investors can choose to go long or short. “What matters at this point in time is … giving people the opportunity to bet on the Saudi economy whether on an optimistic view or pessimistic, and on the other hand to widen the set of opportunities and give more diversification to the UAE portfolio,” he said.

The exchange launched UAE futures trading in 2016 with single stock futures on seven companies. With more UAE companies added since then as well as the Saudi contracts, Nasdaq Dubai currently offers single stock futures on 29 regional companies.