Nasdaq Dubai Ltd. plans to start offering futures contracts on companies listed in Saudi Arabia in the third quarter.

Futures contracts allow investors to trade shares at an agreed price at a specified time in the future.

"The futures will give investors new hedging tools to take long and short positions on the companies, at a time when international investor interest in the Saudi stock market is increasing rapidly," the Dubai bourse said, noting that Saudi Stock Exchange (Tadawul) has seen a 10% increase in its TASI share index in 2018 and a total market capitalization of more than 1.9 trillion Saudi Arabian riyals.

The increase comes amid a potential classification upgrade of Tadawul by MSCI Inc. to emerging market status in June. In March, British share market index company FTSE Russell upgraded Saudi Arabia to secondary emerging market status.

As of May 23, US$1 was equivalent to 3.75 Saudi Arabian riyals.