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Brokerage Business in Saudi Stock Market Dr. Adel Al Gosaibi.

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Presentation on theme: "Brokerage Business in Saudi Stock Market Dr. Adel Al Gosaibi."— Presentation transcript:

1 Brokerage Business in Saudi Stock Market Dr. Adel Al Gosaibi

2 Overview The following table shows the annual growth of Saudi stock market for the period 1995 – The annual transaction volume increased by 1354%; and stock index increased by 1040%. المصدر : الموقع الرسمي لهئية السوق المالية 8,206 1,149 10,298 13, , ,566 3, , ,736 1, , , , , , , , Stock index Annual Trans. Volume bi No of shares millions No of trans (thosands0 year

3 Market Volume and Challenges The annual transaction volume for the year 2005 was 4100 billion.The annual transaction volume for the year 2005 was 4100 billion. The charge for one transaction is: 15 * 2 = SR 30 for every transaction less than SR 10000The charge for one transaction is: 15 * 2 = SR 30 for every transaction less than SR Annual brokerage charge: 0.3 * 4100 /100 = SR 12.3 billion.Annual brokerage charge: 0.3 * 4100 /100 = SR 12.3 billion. Daily brokerage charge: 12.3/(5.5 day * 50 week) = SR 44.7 millionDaily brokerage charge: 12.3/(5.5 day * 50 week) = SR 44.7 million Note: Note: The above brokerage charges dose not include the following: The above brokerage charges dose not include the following: –Open Saudi stock market for foreign investors –Annual superscription charges –Brokerage income form Saudi investor in the global market –Others services that usually provided by brokerage companies such as consolations.

4 Brokers in Saudi Share market Al Belaad BankAl Belaad Bank SAABSAAB Al Ahli bankAl Ahli bank Istethmar Bank Istethmar Bank Saudi Faransi BankSaudi Faransi Bank Al Jazziera bank Al Jazziera bank Arabic nation BankArabic nation Bank Saudi Holandi BankSaudi Holandi Bank Al Rajhi BankAl Rajhi Bank Riyadh BankRiyadh Bank SAMBASAMBA

5 Challenges There are many factors that can effects on the brokerage business: There are many factors that can effects on the brokerage business: Oil priceOil price Market stability and political crisisMarket stability and political crisis Registering 30 companies to stock market out of 50 this year 2006.Registering 30 companies to stock market out of 50 this year Give permission to more brokerage companies to be in the business.Give permission to more brokerage companies to be in the business. Annual daily volume for the year 2005 was 15 bil.Annual daily volume for the year 2005 was 15 bil. Open the Saudi share market to non-Saudis and may be for out-sider..Open the Saudi share market to non-Saudis and may be for out-sider.. Establish parallel market to the current one.Establish parallel market to the current one.

6 Candidates for Partnership with Dhahran Global E*TRADEE*TRADE The Charles Schwab CorporationThe Charles Schwab Corporation Saxo BankSaxo Bank EXXEXX

7 E*TRADE 20 year experience in electronic trade20 year experience in electronic trade 4.3 million costumer4.3 million costumer $ 8 billion share market$ 8 billion share market 3300 employee3300 employee $ 1.6 billion annual income$ 1.6 billion annual income $ 390 million annual net benefit.$ 390 million annual net benefit. Provide service worldwide..Provide service worldwide.. المصدر : الموقع الرسمي للشركة تلفون :

8 Charles Schwab Inc. Charles Schwab Inc. 35 years experience.35 years experience. 7 million customer7 million customer Company share3 volume is $ 18.6 billionCompany share3 volume is $ 18.6 billion employees employees. $ 4.46 billion annual income$ 4.46 billion annual income $730 million annual net profit.$730 million annual net profit. Provide service worldwideProvide service worldwide

9 Saxo Bank Saxo Bank !3 year experience in electronic stock trading!3 year experience in electronic stock trading 700 thousand costumer worldwide700 thousand costumer worldwide $ 860 million company share$ 860 million company share 350 employees350 employees $ 250 million annual income$ 250 million annual income $ 50 million annual net profit$ 50 million annual net profit Provide service in 115 countries worldwide.Provide service in 115 countries worldwide. المصدر : الموقع الرسمي للشركة

10 Sample of Interface from EXX


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