Saudi Market: A Comprehensive Guide to the Saudi Stock Exchange

The Saudi market, or "Tadawul," is the official stock exchange of the Kingdom of Saudi Arabia and the largest financial market in the Middle East and North Africa region. Established in 2003 as a joint-stock company under the supervision of the Saudi Capital Market Authority (CMA), it regulates and manages the trading of securities in the Kingdom. The Saudi market boasts significant economic weight, with Saudi Aramco being the largest listed company and one of the largest companies globally by market capitalization. It includes over 220 listed companies in vital sectors such as energy, petrochemicals, banking, insurance, telecommunications, and manufacturing.

The Tadawul plays a crucial role in supporting the Kingdom's Vision 2030 to diversify the economy and reduce dependence on oil, as the Saudi government seeks to enhance transparency and attract local and foreign investments. The market provides a vital platform for capital flow, offering local and international investors diverse opportunities through stocks, sukuk, bonds, and exchange-traded funds.

Regionally, the Saudi stock exchange leads compared to other markets in terms of market capitalization, liquidity, and the number of listed companies, making it a major attraction for investors seeking long-term growth opportunities.

The Saudi market consists of two main sections: the main market and the parallel market (NOMU). The main market is the primary platform where the largest Saudi companies are listed and is subject to strict listing requirements regarding company size and financial disclosure transparency. The main market includes companies such as Aramco, SABIC, Al Rajhi Bank, National Commercial Bank, STC, and others.

The parallel market (NOMU) was launched in 2017 to provide a trading platform for small and medium-sized enterprises with more flexible listing conditions. NOMU aims to support startups in accessing financing and growing their businesses, with less stringent disclosure requirements compared to the main market, facilitating entrepreneurs in listing their companies.

The existence of both markets enhances market depth and diversity, creating investment opportunities suitable for various types of investors and risk levels. The parallel market also supports the government's direction towards developing the small and medium-sized enterprise sector and contributes to achieving the goals of Vision 2030.

The performance of the Saudi market is measured through several key indicators, the most important being the general index (Tadawul All Share Index - TASI), which reflects the performance of all stocks listed in the main market. TASI is the primary reference index for tracking market movements and assessing economic health, reaching approximately 12,000 points by the end of 2024, with record levels in 2025 exceeding 12,800 points.

In addition to the general index, there are sectoral indices that measure the performance of vital sectors such as banking, petrochemicals, telecommunications, industry, services, insurance, and more. These indices allow investors to analyze trends in different sectors and compare their performance with the general index. Special indices for the parallel market (NOMU) have also been launched to track the performance of small and medium-sized enterprises.

These indices are continuously updated based on prices and trading volumes and are essential tools in financial analysis and evaluating investment strategies, without carrying direct recommendations or advice.

The Capital Market Authority (CMA) oversees the regulation and management of the Saudi market, establishing rules and regulations that ensure investor protection, transparency, and fairness in trading. These regulations include requirements for regular financial disclosures, listing and delisting rules, accounting standards, and market manipulation prevention systems. The CMA also defines transaction settlement mechanisms and monitors the compliance of listed companies with the disclosure of financial results and material news.

The authority imposes specific restrictions on foreign ownership in listed companies, currently allowing foreigners to own up to 49% of any company’s shares, with the possibility of increasing this percentage in the future based on regulatory developments. The CMA also supervises public offerings, provides a fair and transparent investment environment, and works on developing the market's technical infrastructure to meet global standards.

These laws play a crucial role in enhancing the confidence of local and international investors and ensuring the sustainability and integrity of the Saudi market.

The Saudi market has gradually opened its doors to foreign investors since 2015, allowing them to participate in the growth of the Saudi economy and benefit from the strength of local companies. Foreign investors can own up to 49% of any listed company in the main market, and stocks are traded through licensed brokers after fulfilling regulatory requirements and opening a trading account.

Foreign investors are exempt from capital gains taxes and dividend distributions, making the Saudi market an attractive environment for global capital. Government officials have indicated future plans to raise the foreign ownership limit in certain sectors or companies to 100%, aiming to increase liquidity and enhance the market's position within global indices.

Despite these advantages, foreign investment is subject to the oversight of the Capital Market Authority, and there are requirements for transparency and accurate disclosure. Foreign investors must comply with local laws, and regulations may change based on economic and political developments in the Kingdom and the region.

The Saudi market includes several vital sectors that reflect the structure of the national economy. Among the most prominent sectors are:

1. Energy and Petrochemicals: Led by Saudi Aramco and SABIC, this sector is the backbone of the Saudi economy in terms of market capitalization and revenues.
2. Financial Sector (Banks and Insurance): Includes Al Rajhi Bank, National Commercial Bank, and Saudi French Bank, and is considered one of the most stable and liquidity-attracting sectors.
3. Telecommunications Sector: Led by companies such as STC, Mobily, and Zain Saudi Arabia, it is experiencing rapid growth supported by digital transformation.
4. Industrial Sector: Includes cement, mining, and manufacturing companies.
5. Services, Entertainment, Transport, and Logistics Sectors: These sectors are growing, supported by Vision 2030 and infrastructure projects.

These sectors play a crucial role in diversifying national income sources and provide investors with diverse options that align with various investment strategies.

During 2024 and 2025, the Saudi market continued to record strong performance despite regional challenges and fluctuations in oil prices. The general index (TASI) reached approximately 12,000 points by the end of 2024 and rose to over 12,800 points in September 2025 after easing foreign ownership restrictions, achieving the largest jump in five years. The market capitalization of all listed companies reached around 10.5 trillion Saudi Riyals.

The average daily trading volume ranged between 20 and 30 billion Riyals, reflecting high liquidity and investor confidence. Companies such as Aramco, SABIC, Al Rajhi Bank, and National Commercial Bank topped the market's weight list. Major companies recorded generous dividends ranging from 3% to 6% annually of the share value, while the banking and petrochemical sectors achieved good gains.

Small and medium-sized enterprises in the parallel market experienced revenue growth, supported by government programs to promote entrepreneurship, while defensive sectors (such as healthcare and telecommunications) maintained relative stability. These figures reflect the robustness of the Saudi market and its ability to face challenges and achieve sustainable growth.

The Saudi market is witnessing a surge in digital transformation and financial technology, which is reflected in trading efficiency and information transparency. The Capital Market Authority and the Saudi Exchange Group have launched advanced electronic platforms that allow for executing trades and monitoring prices and real-time data, in addition to facilitating disclosure processes and issuing periodic financial reports.

The government has focused on encouraging innovation through partnerships with global technology companies in areas such as cloud computing, cybersecurity, and 5G services. For instance, telecommunications companies like STC and Mobily have enhanced their investments in digital infrastructure, and a trading platform has launched new technologies for data analysis and market movement tracking.

These transformations have attracted a broader segment of investors, including individuals and foreign investment funds, and have helped enhance market efficiency and improve the business environment in line with the goals of Vision 2030.

The Saudi market includes several giant companies that play a pivotal role in the national economy. Among these prominent companies are:

- Saudi Aramco (2222): The largest listed oil company in the world, representing 40-50% of the total market capitalization of the Saudi market, known for its high dividends and financial stability.
- Al Rajhi Bank (1120): The largest Islamic bank in the world by market capitalization and assets, characterized by its profit growth and generous distributions.
- Saudi Basic Industries Corporation – SABIC (2010): A leader in the petrochemical sector, representing a strategic arm within economic diversification projects.
- Saudi Telecom Company (STC - 7010): The largest telecommunications operator in the Kingdom, with a market value ranging between 150-160 billion Saudi Riyals. In 2024, it achieved revenue growth of 3-5%, and its net profit for the third quarter rose to 2.2 billion Riyals. Its price-to-earnings ratio is around 10-11 times, with an annual dividend yield of 4-5%.

These companies serve as the engine of the general index and are a reference for investors when evaluating the performance of the Saudi market.

The Saudi market is characterized by strong competition among companies in every sector. In the telecommunications sector, STC competes with Mobily and Zain Saudi Arabia for mobile, internet, and corporate services, with significant expansion in cloud computing and technological innovation. In the banking sector, Al Rajhi Bank competes with National Commercial Bank and Saudi French Bank to provide comprehensive banking services to individuals and companies.

In the industry, SABIC, the Saudi Electricity Company, and many cement and mining companies share a significant market share. The energy sector remains centered around Aramco, while the services, entertainment, and tourism sectors emerge as new areas for competition supported by Vision 2030.

This positive competition reflects on the development of service quality, stimulates innovation, and increases the options available to both investors and consumers.

The period of 2024-2025 witnessed a wave of reforms and impactful developments in the Saudi market. Among the most notable was the announcement by the Capital Market Authority to study lifting restrictions on foreign ownership, which led to a 5.1% rise in the general index in one day and raised ambitions to attract global investments. Regulatory amendments were also introduced to facilitate listings in the parallel market "NOMU" and increase transparency in financial result disclosures.

Regulatory authorities launched initiatives to enhance digitization, including the development of electronic trading platforms and their integration with smart data analysis systems. The market also witnessed mergers and acquisitions among major companies in banking and industry, supporting operational efficiency and expanding the capital base.

On the macroeconomic front, the government continued to support infrastructure projects and expand into promising sectors such as tourism, entertainment, and renewable energy, positively impacting market performance and opening new horizons for investors.

Trading sessions in the Saudi market open from Sunday to Thursday, from 10:00 AM to 3:00 PM local time. The main trading session is preceded by an auction period from 9:30 AM to 10:00 AM, where buy and sell orders are collected to determine the opening price. There is also a short break from 12:00 PM to 12:30 PM.

Transactions are executed electronically through an automated trading system, and price and volume data are available in real-time on the Tadawul website and licensed broker platforms. All operations are monitored by the Capital Market Authority to ensure transparency and equal opportunities. On public holidays or religious occasions, market session times may temporarily change.

Investors can execute market orders, limit orders, or conditional orders according to their strategies without a minimum investment requirement, while adhering to the authority's instructions and regulations.

The performance of the Saudi market is influenced by several key factors such as global oil prices, political and security stability in the region, global monetary policies (especially interest rates), and developments in the local economy. When oil prices rise, the profitability of major companies increases, and government liquidity improves, positively reflecting on the market. Conversely, during periods of declining oil prices or escalating regional tensions, the market may experience noticeable fluctuations.

Other risks include fluctuations in the local currency, changes in tax or regulatory policies, and the impact of global market performance. Attention should also be paid to company-specific risks such as changes in management or unexpected financial results.

It is essential for investors to regularly study and analyze these factors and use official and reliable sources to follow news and reports, emphasizing the importance of consulting a licensed financial advisor before making any investment decision.

The Saudi market offers numerous advantages for investors, including:

- High liquidity compared to regional markets.
- Absence of taxes on stock profits and capital gains.
- Diversity of sectors and major companies with stable financial performance.
- Generous dividend distribution policies in many leading companies.
- The existence of a parallel market to support small and medium-sized enterprises.
- Development of technical infrastructure and digital trading platforms.

These factors contribute to making the Saudi market attractive to a wide range of investors, with the potential to benefit from economic growth and the transformations of Vision 2030. However, each investor should assess their financial goals and appropriate risk level, and not rely on forecasts or rumors in making investment decisions.