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Riyadh, Saudi Arabia
What You Need to Know First
You qualify for a dividend if you own the share at the close of the company’s entitlement date and your ownership is recorded in the shareholder register kept by the Securities Depository Center (Edaa) once settlement completes. Saudi trades settle two business days after execution (T+2), so the last day you can buy and still qualify is the entitlement date itself. If you buy the next day or later, the dividend goes to the previous owner. Cash dividends then arrive in the investment account linked to your portfolio.
How Does a Saudi Company Announce a Dividend?
A dividend is decided in stages, and the company announces each one through the Saudi Exchange.
| Stage | What happens |
|---|---|
| Board recommendation | The board proposes a payout after the financial results |
| General assembly decision | The ordinary general assembly sets the payout and the entitlement date |
| Entitlement date | The day whose close decides who qualifies |
| Distribution date | The day the money is paid to qualifying shareholders |
The CMA’s Corporate Governance Regulations say the general assembly sets the percentage of net profit to distribute after reserves, and that a shareholder is entitled to a share according to the assembly’s decision, or the board’s resolution for interim dividends. The Implementing Regulation of the Companies Law for Listed Joint Stock Companies adds that interim dividends need an annual assembly resolution authorising the board.
Who Is Entitled to the Dividend?
The Implementing Regulation defines registered shareholders as those listed in the shareholder register at the end of the dividend entitlement day set by the ordinary general assembly or the board. The register is prepared and kept by the Depository Center.
Company announcements usually set two conditions: you own the share at the close of trading on the entitlement date, and you are registered with Edaa by the end of the second trading day after it. The gap exists because the register reflects only trades that have finished settling.
What Is the Last Day to Buy to Qualify?
Edaa’s settlement page states that standard exchange trades settle two business days after execution. The Saudi market trades from Sunday to Thursday. Here is a worked example with illustrative dates, assuming an entitlement date of Sunday 8 November.
| Buy date | Settlement completes | Qualifies? |
|---|---|---|
| Thursday 5 November | Monday 9 November | Yes |
| Sunday 8 November (entitlement date) | Tuesday 10 November | Yes, and it is the last day to buy |
| Monday 9 November | Wednesday 11 November | No |
The cut-off is the end of Tuesday 10 November, the second trading day after the entitlement date. Sunday’s purchase settles before the cut-off, while Monday’s settles after it. The same logic applies to sellers. Someone who sells on Monday 9 November keeps the dividend, because they owned the share at the close of the entitlement date. If the sale happens on the entitlement date itself, the right passes to the buyer.
What Happens to the Share Price the Next Day?
On the first trading day after the entitlement date, new buyers no longer receive that dividend, and the market factors that in. But a share price moves with supply, demand and news, so do not assume it falls by exactly the dividend amount, and do not treat buying before the entitlement date as a guaranteed gain. The dividend is one part of a share’s return, not a separate profit on top of its price.
How Do Cash Dividends Reach Your Account?
Company announcements describe payment as an automatic deposit into the investment accounts linked to shareholders’ portfolios at their banks. The Saudi Exchange’s dividends calendar helps you plan around payment dates. The regulation gives the company at most 15 business days from the entitlement date to carry out the distribution, and each company announces its actual date. In our illustrative example that limit falls around the end of November, before counting any public holidays. If a company issues bonus shares instead of cash, they are added to your holding on the date it announces.
Because dividends land in your portfolio’s account, it helps to choose a platform that shows account activity clearly. Our guide to choosing a trading app compares what to look for.
What Rights Do Shareholders Have?
| Right | What it means |
|---|---|
| Share of profits | You may receive your portion of net profits that are distributed in cash or through the issuance of shares |
| Attending and voting | You may attend general and special assemblies, take part in deliberations and vote on decisions |
| Information | The decision, its percentage and its dates are announced publicly |
These rights come from Article 5 and Article 9 of the Corporate Governance Regulations. When an assembly invitation arrives, read the agenda: it lists what will be voted on, including any dividend proposal.
Where Can You Find Dividend Announcements?
Listed companies publish their announcements under issuer announcements on the Saudi Exchange website, with the entitlement date, distribution date and eligibility wording. If you do not have an account yet, you can open a trading account with Derayah Financial. The platform page says residents open an account electronically through the unified national access portal, while Gulf nationals visit a branch. It also states that Derayah’s own commission on Saudi stocks on the main market and Nomu is zero, while regulatory fees still apply.
Is US Stock Dividend Timing Different?
Yes. The company sets a record date, and the exchange sets an ex-dividend date, which is usually the record date itself. According to the SEC’s explanation of ex-dividend dates, if you buy on the ex-dividend date or after, you do not receive the next dividend. If you trade US stocks through Derayah Global, check each company’s dates separately, because US market rules differ from the Saudi ones.
Frequently Asked Questions
Do I need to attend the general assembly to receive the dividend?
No. Your entitlement depends on owning the share on the entitlement date and being registered. Attending and voting is an additional right you can use if you wish.
What is the difference between the entitlement date and the distribution date?
The first decides who qualifies and the second decides when the money is paid. Under the regulation, the gap between them is at most 15 business days.
What if the company changes its payment date?
A company can move the distribution date alone while the entitlement date stays as announced. It announces the change officially and gives the reason.
Does a company have to pay a dividend every year?
No fixed percentage is required. The general assembly decides the payout after reserves, and the board must set a clear distribution policy. A dividend paid in one year does not guarantee another.
Do dividends reach me automatically?
Usually yes, as a deposit in the investment account linked to your portfolio. If you do not see the amount after the distribution date, contact your brokerage firm.
This content is educational and is not investment advice. Investing involves risk, and you may lose part of your capital. Past dividends do not guarantee future ones.
Sources
- Corporate Governance Regulations, Capital Market Authority
- Implementing Regulation of the Companies Law for Listed Joint Stock Companies, Capital Market Authority
- Settlement, Edaa (Securities Depository Center)
- Issuer Financial Calendars, Saudi Exchange
- Ex-Dividend Dates, Investor.gov
- Derayah platform, Derayah Financial
