tadawul csd: overview of new services 25 th apr, 2012
TRANSCRIPT
Tadawul CSD: Overview of New Services
25th Apr, 2012
Agenda
Tadawul at a Glance
Market Stats
CSD Overview
Issuers’ Obstacles
Overview of New Services
Next Steps
Tadawul Roles
Services Value Chain
We enable Saudi companies to raise the capital they needto grow, by listing securities on our highly-efficient, transparent, and well-regulated market.
Through our market we give companies access to adeep and liquid pool of investment capital. Once companies have been admitted to trading, we use our services and expertise to help them maximise the value of their listing
We enable Saudi companies to raise the capital they needto grow, by listing securities on our highly-efficient, transparent, and well-regulated market.
Through our market we give companies access to adeep and liquid pool of investment capital. Once companies have been admitted to trading, we use our services and expertise to help them maximise the value of their listing
We invest in technology to provide the trading platform used by investors, via broking firms, to buy and sell securities.
Our systems provide fast and efficient access to trading allowing investors, brokers and institutions to quickly access the equity market. Trading is tightly integrated to the Tadawul depository, with all sell orders being checked for availability of the security prior to order release into the market
We supply high-quality, real-time prices, market indices, news and other information to the financial community. Strong relationships with data vendors help ensure the markets receive the information they depend upon.
We invest in technology to create new applications for ourdata and seek to constantly upgrade our products andservices.
We supply high-quality, real-time prices, market indices, news and other information to the financial community. Strong relationships with data vendors help ensure the markets receive the information they depend upon.
We invest in technology to create new applications for ourdata and seek to constantly upgrade our products andservices.
We provide the securities settlement system for both debt and equity instruments, as well as custody services. Our computerized book-entry-settlement system enables instant settlement and delivery of securities at T+0 for equities.
Our CSD provides an important range of registration and depository services to investors and listed companies, enabling companies to manage their service requirements towards their investor base
We provide the securities settlement system for both debt and equity instruments, as well as custody services. Our computerized book-entry-settlement system enables instant settlement and delivery of securities at T+0 for equities.
Our CSD provides an important range of registration and depository services to investors and listed companies, enabling companies to manage their service requirements towards their investor base
1. Listing 2. Trading Services
3. Market Information 4. Settlement, Registry and Depository
Company Admission
to Exchange
List
Company Admission
to Exchange
List
IPO Share-holder
registration
IPO Share-holder
registration
Order entry
Order entry
Trade
Execution
Trade
Execution AllocationAllocationTrade info process &
dissem.
Trade info process &
dissem.
Listed Company news &
disclosure
Listed Company news &
disclosure
Clearing and
netting
Clearing and
nettingSettlementSettlement PaymentPayment Accounting
& reporting
Accounting & reporting Custody Custody
Shareholder database
services (registry)
Shareholder database
services (registry)
CompanyMaintain& Renew in
Exchange List
CompanyMaintain& Renew in
Exchange List
Company Admission
to Exchange
List
Company Admission
to Exchange
List
IPO Share-holder
registration
IPO Share-holder
registration
Order entry
Order entry
Trade Execution
Trade
Execution AllocationAllocationTrade info process & dissem.
Trade info process &
dissem.
Listed Company news & disclosur
e
Listed Companynews &
disclosure
Clearing and
netting
Clearing and
nettingSettlementSettlement PaymentPayment Accounting
& reporting
Accounting & reporting Custody Custody
Shareholder database services (registry)
Shareholder database
services (registry)
CompanyMaintain& Renew in Exchange
List
CompanyMaintain& Renew in
Exchange List
Trading & Settlement Cycle
Page 5
Client places order with broker
Broker OMS transfers order to
Tadawul
Tadawul Depository checks order for
availability of client holding
Order entered into Tadawul trading
system
Shares deducted real-time from
Sellers Depository account
Tadawul system prints trade ticket
batch EOD
Bank receives cash end-of-day via SAMA RTGS netting system
Broker may optionally instantly credit selling client cash account,
prior to receiving cash from clearing bank at EOD
Client places order with broker
Broker checks client balance (credit limit)
Broker OMS transfers order to
Tadawul
Order entered into Tadawul trading
system
Shares transferred real-time to
Buyers Depository account
Tadawul system prints trade ticket
batch EOD
Bank pays cash end-of-day via SAMA
market-wide netting process (RTGS)
Broker deduct cash from its client cash account balance (prior to sending to Clearing bank for EOD cash netting)
Order rejected by Tadawul if client holding at Depository not
adequateOrder
Executes at
Tadawul
SELLER
BUYER
Cash settlement occurs end of
day, before start of next Tadawul
trading day
Broker requires Clearing Bank with account at SAMA (SARIE) to make
and receive cash settlements arising from trading at Tadawul. Tadawul
calculates net EOD position of broker and instructs SAMA to
automatically credit/debit Clearing Bank’s account at SAMA
Feature: Tadawul checks each broker buy order real-time before order book entry, for potential breach of broker’s intra-day settlement position limit as set by clearing bank. Broker’s position recalculated real-time (position = limit + executed trades – buy orders). Over limit buy orders are rejected prior to order book entry
EOD: Clearing Bank Cash NettingT+0: instant delivery and
cash payment for investors
Agenda
Tadawul at a Glance
Market Stats
CSD Overview
Issuers’ Obstacles
Overview of New Services
Next Steps
Market Stats
• GDP of 2,100 B SAR (560B USD)• Equity market free float is about 40%• Private placements:
• 12 private bonds (OTC traded)• 8 private JSCs (OTC traded)
• 15 sectors (major sectors are Petrochemical, Banking, Cement, Retail, Telecom)
• Market PE of 13-14x• 2011 Corporate earnings of over 90B SAR• About 50B SAR dividends distributed in 2011
Security No of Listings Market Cap(SAR) Settlement Cycle
Equity 153 1,480 B T+0Bonds 8 38 B T+2ETF 3 85 M T+0
Capital RaisingNUMBER OF NEW COMPANIES LISTING (IPO)
IN 2008, NEW IPOS AT TADAWUL RAISED $9.7 BN, MAKING TADAWUL THE SECOND LARGEST IPO MARKET IN THE WORLD IN 2008 AFTER NYSE (AHEAD OF LSE AND NASDAQ)
* Excludes secondary capital raising and rights issues
CAPITAL RAISED* (IPO) US$ BN
2003
2004
2005
2006
2007
2008
2009
2010
1
2
4
9
26
13
11
10
2003
2004
2005
2006
2007
2008
2009
2010
1.4
0.3
1.5
2.9
4.8
9.7
1.2
1.1
Market GrowthNumber of Transactions
(millions)
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 110
20
40
60
80
100
120
Mill
ions
CMA established to regulate the market
Tadawul set up to run the Saudi Equity market
Tadawul set up to run the Saudi Equity market
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 -
1,000
2,000
3,000
4,000
5,000
6,000 Value of Equities Traded (SR Bn)
Valu
e of
Equ
ities
Tra
ded
(SR
Bn)
= US$ 1,403bnApproximately the same
size as Italy
= US$ 1,403bnApproximately the same
size as Italy
50% drop to US $683bn
50% drop to US $683bn
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 -
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Number of Shares Traded (Million)
Num
ber o
f Sha
res T
rade
d (M
illio
n)
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 -
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
Value of Market Capitalisation (SR Bn)
Valu
e of
Equ
ities
List
ed (S
R bi
llion
s) = US $657bn= US $657bn
TASI Index & Market PE
2004 2005 2006 2007 2008 2009 2010 2011 Current
8,206.2
16,712.6
7,933.3
11,176.0
4,803.06,121.8 6,620.8 6,417.7
7,568.0
TASI - Price Level
2004 2005 2006 2007 2008 2009 2010 2011 Current
22.9
17.115.8
14.6 15.1
19.9
16.213.9
14
PE Ratio
Agenda
Tadawul at a Glance
Market Stats
CSD Overview
Issuers’ Obstacles
Overview of New Services
Next Steps
Key Functions
Master Data Maintenance.
System and Portfolio Maintenance.
Member and Issuer Maintenance.
Corporate Action
Initial Public Offering (IPO).
Capital Increase / Decrease.
Acquisition or Merge.
Clearing and Settlement
(T+0) Settlement for Equity and ETFs.
(T+2) Settlement for Bonds.
Maintain brokers settlement cap.
Sharebook Reporting.
Securities Transactions
Ownership Transfer.
Pledges.
Ownership Restrictions.
Ownership Limit.
Lock / Unlock over Securities.
Dematerialization of Certificates.
General Assembly and e-voting.
Members Training.
Inquiries
Investor Services (Reception).
Accounts & Portfolios
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
52,498 78,811 425,927
1,384,287
2,574,326
3,575,460
3,666,528
3,948,843
3,997,556
4,046,152
4,100,000
Inve
stor
s
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2,788 51,232 435,771
1,652,312
3,478,928
5,335,735
5,884,101
6,685,114 6,930,516
7,137,397
7,400,000
Portf
olio
s
Agenda
Tadawul at a Glance
Market Stats
CSD Overview
Issuers’ Obstacles
Overview of New Services
Next Steps
Issuer Obstacles
Difficulty in communicating with shareholders
Lack of an easy mechanism for shareholders to know about their dividend entitlements
Accumulation of unclaimed amounts
Difficulty in participating in AGMs
Shareholders unaware of certain certificates (materialized shares)
Filling the gap between issuers and their shareholders
Empowering investors by enabling them to participate more effectively
Elevating the practices of shareholder relations at listed companies
Tadawulaty
Development Timeline
10/20091st eVoting used
In acquisition txn
03/2011Launching 1st phase of
Tadawulaty
10/2011 – 03/2011eVoting applied for a
number of AGMs
10/2011Launching 2nd phase
of Tadawulaty
2012 – 2011Promotion and
awareness of services to listed companies
2013 – 2012Developing more
services and promotion of existing ones
Existing Services
Electronic Voting Trading Restriction Tawasul Service
AGM ManagementDividend Entitlement & Payment Status
Registry Services
Sharebook Access
“Being-Developed” Services
Call Center Search Engine for unclaimed amounts
Customized ReportsWireless Voting
Agenda
Tadawul at a Glance
Market Stats
CSD Overview
Issuers’ Obstacles
Overview of New Services
Next Steps
Registration & Identity Check
Electronic Registration - Online
LoginVisit
User ID
Password
Broker website
RedirectUser ID
PasswordConfirm
TadawulatyInvestor
In person
Visit
Investor
• Validate Identity• Apply for investor
Broker website
Enter OTP sent to mobile no
Tadawulaty
Send
AGM Services
First Phase (Setup):
• Issuers to send the following: Company Logo. Attachments (i.e. financial statements, CV’s or anything that helps
the investor in making a good decision). Agenda items. Owners completely excluded from the AGM or excluded at item
level. E-Voting duration (e.g. 1 to 2 weeks).
• Tadawul setup and approval of AGM:AGM preparation:
1. Enter basic information.2. Enter detailed information.3. Enter agenda data.4. Add agenda items (e.g. a simple item, cumulative voting, normal
voting).5. Identify AGM members (e.g. AGM Secretary, Ministry of
Commerce representative... etc.)6. Data entry of AGM Minutes of Meeting.
Second Phase (E-Voting):
• Starting Electronic Voting.
• Notification to shareholders of the company via SMS and e-mail.
• Voting on behalf: brokers will call shareholders to vote on behalf of them.
• Shareholders have the option to change their votes.
• E-Voting will end before 11:00 a.m. on AGM day and Sharebook will be updated automatically.
Third Phase (AGM Day):
• The Company will have an updated Sharebook in the same day of AGM meeting.
• Distributing of printed voting cards to all attendees (i.e. shareholders and voters on behalf).
• Shareholders still have the option to change their votes.
• Tadawulaty can provide the company with the following reports:1. Attendance report. 2. Attendance report including vote types.3. Missing voting cards report.4. Total voting result report.
• All AGMs will be archived including reports, issuer can review them at anytime.
5. Voting progress report.6. Attendance holding summary report.7. Minutes of meeting report. 8. Voting summary report.
Facilities
eVoting & AGM stats
18 AGMs managed in 2011, 16 reached quorum from 1st meeting
Over 11 AGMs so far in 2012 – 30 AGMs requested so far
eVoting for 10 different AGMs were live – same time
Higher percentage from outside the AGM city
In 2011, the average of eVoting was about 15-20%. Higher percentage in 2012 (35% so far)
Unlisted companies are also using this service
Some changes are coordinated with brokers to increase this further
Dividends Services
Historical Dividend
Dividends services
Newly Announced
Periodical update of
payment status
Payment Status
Entitled Dividend
Expected Dividend
Dividends Search Service
Periodical update of
payment status
Payment Status
Entitled Dividend
unclaimed amounts
distribution
Dividends Services Process (Entitled, Announced)
Investor will see and get the following (Expected Dividend)
Investor will see and get the following (Entitled Dividend)
Investor will get Notification (SMS & Email) for Expected dividendInvestor will see Expected Dividend (daily) per portfolio and Total
Investor will get Notification (SMS & Email) for Entitled DividendInvestor will see the Actual Entitlements per portfolio and Total
Issuer
The issuer will announce new Dividend to be approved by the next AGM
The announcement will be publish in Tadawul website
Tadawul admin will approved the announcement for Tadawulaty investor
Share Book Change daily
Share Book and Entitlements fixed
When the AGM approved the dividend the status will change in tadawulaty to Entitled
The share Book will be ready in Tadawulty system and the issuer can download the share book for (Certificate and Portfolio holder )
and send it to the distribution bank
The Bank will distribute the dividend and will send the payment status to Tadawul to
uploaded in the Tadawulaty system
Tadawulaty will update the payment status periodically as agreed with the SABIC For
each dividend and each company
Investor will see the payment status for each dividend with updated date
Investor will SMS and e-mail notification for any unclaimed amount
Dividends Stats
Historical entitled dividends are available in Tadawulaty from 2001 to 2012
34 companies have provided dividends payment status from 2001 to 2012
Total amount of unclaimed dividends for those companies is more than SAR 666 million which belongs to 155,506 investors
Total amount of entitled dividends available in Tadawulaty is more than SAR 278 billion which belongs to 2.1 million investors
Total amount of dividends payment status available in Tadawulaty is about SAR 77 billion which belongs to more than 1 million investors
Consolidated Reporting
Member 1 Member 2 Member 3 Member 4
Stocks
Sukuk
BondsCertificates
ETFs
Tadawulaty
Unlisted Companies
Listed Companies
Unlisted Companies
Tadawul provides a list of registry services to listed companies
Tadawul will provide the same list of services to unlisted companies
Corporate actions reporting
Shares Ownership registry service
Shares registry service
Sharebook reporting
Dividends Reporting service
AGM & e-Voting service
Sharebook Reporting
Login to Enter the request
Review the request
Check the file and review the company
details
The admin approved or reject the request
Tadawul admin
1 2
Request will send3
The admin will enter the reason of rejection
If Request is ApprovedSharebook will be send to the company
Company
Chose requested date and file type
If Request is Rejected
Tadawul will Pledge all issuer stock and will send Trading Restriction notification for all Top Executives, Board of Directors and their associates
Trading Restriction
Shareholder Communication Service (Tawasul)
The Tadawulaty system will run the
massages in the chosen date
SMS Gateway
Issuer
Tadawul admin will review the request and approved after the review
Issuer will prepare the massages
SMS and e-mail notification will be send by the system
The investor will receive the massage from the company
Dividend Entitlement & Payment Status
AGM invitation
IPO Deposit
Important News
………………………
Tadawul will send report with number of notification that send to investors
The issuer will enter Tadawulaty system and enter the required massages and define the
sending way (SMS, e-mail)
Roadshow announcements
Agenda
Tadawul at a Glance
Market Stats
CSD Overview
Issuers’ Obstacles
Overview of New Services
Next Steps
Shareholders Services Evolution
Basic Registry Services
Fragmented Shareholder
Services
Integrated Shareholder
Relations Services
Full Fledged Investor Relations Services
• Keep the shareholders data
• Generate sharebook report on request
• Consolidated Portfolio Reporting
• AGM & e-voting• Dividends Reporting• Sharebook reporting• Certificates Search• Tawasul• Trading Restriction
• Shareholder relations services
• Wireless voting• Call center
• Shareholder relations services
• Webcasting• Investors Targeting• Competitive
Intelligence
Envisaged Shareholder Relations Package