Saudi exchange opts for Nasdaq OMX trading engine
Saudi Arabia’s stock exchange – the Tadawul – is to replace its trading engine with Nasadaq OMX’s X-Stream INET technology, due to go live at the beginning of next year.
The Tadawul was previously using the Nasdaq SAXESS engine. The upgrade is expected to bring greater capacity and higher processing speeds to the exchange, which is currently the largest and most liquid market in the Middle East. The Tadawul has a market capitalisation of $373 billion and an average daily trading value of $2.05 billion. It also accounted for 90% of the value traded in the GCC region at the end of 2012.
“Our investment in the X-stream INET trading platform is an investment in the future of our capital markets,” said Adel Al-Ghamdi, chief executive officer at the Tadawul. “Its capacity and low latency will provide our members and their clients with enhanced performance and speed. The platform’s scalability across asset classes also enables our marketplace to grow and adapt as our business environment and requirements change.”
The X-Stream engine being installed by the Saudi stock market is already being used in at least 22 different markets around the world, including New Zealand, where it was installed earlier this year. The technology can sustain an order rate of 40,000 orders per second with latency under 40 microseconds, according to its official specifications. It also has a plug-in library of up to 300 functions, which can be used to customise it.
Despite long-standing rumours that it is about to open up to direct foreign investment, the Saudi exchange is still tightly controlled and access is restricted. Workaround tools include the p-notes available from CA Cheuvreux, now Kepler Cheuvreux, which offer indirect access through alternative instruments.