Open Market Forums: What You Need to Know About Stock Trading in Saudi Arabia

The term "open market forums" originated in the popular circles of Saudi traders, particularly in online forums and discussion groups. Although it does not represent an official financial or legal term in the Saudi financial market, it has gained widespread popularity to refer to open dialogue spaces where active traders, referred to as "whales," gather. The term "whales" in this context refers to experienced investors or those believed to have a significant influence on stock movements, whether through large trades or information dissemination.

These forums rely on free and informal discussions, where members often exchange undocumented opinions and analyses or rumors about market trends. They serve as open discussion forums that spark rumors, technical analyses, and expectations regarding company performance. For example, you may find lengthy discussions about the results of Hail Cement or references to potential news about the cement sector, without any official backing from the company or regulatory authorities.

These forums reflect the culture of individual trading prevalent in the Saudi market, where individual investors seek to compensate for the lack of official information or its slow dissemination by relying on alternative sources. Similar terms like "stock whales" are used to denote influential or seasoned individuals in the market, attempting to mimic global terms like "market whales." Often, the term "open market forums" is used metaphorically to describe an intense and informal trading environment filled with speculation and rumors, reflecting the social interaction nature in the Saudi financial market.

The Saudi financial landscape has seen a notable evolution in communication methods among traders, starting from small gatherings in cafes to the emergence of online forums in the early 2000s. With the advent and widespread adoption of the internet, specialized forums like "stock whales" quickly became central platforms for discussions about stocks and exchanging experiences. These forums played a crucial role in transferring financial culture among a wide range of Saudis, especially during the real estate and economic boom witnessed in the Kingdom between 2004 and 2007.

During that period, financial data or official news were not as readily available as they are today, so traders relied on forums to relay urgent news, discuss rumors, and provide technical or fundamental analyses of listed companies. Over time, as the number of participants increased, these forums became dynamic environments attracting both beginners and professionals. The functions of these forums extended beyond discussions to include publishing technical analyses, price tables, and even organizing informal educational courses.

In the last decade, with the evolution of social media and smartphone applications, these forums have expanded from traditional forums to WhatsApp, Telegram, and Twitter groups. However, the fundamental nature remains the same: a free space for discussing everything related to the market, with a strong presence of popular terms like "open market forums." Despite technological changes, these forums continue to play a significant role in shaping individual investors' trends, especially as the difficulty of obtaining some official information or specialized analyses in real-time persists. The Saudi financial forums remain a vivid example of the ability of digital communities to create their unique trading culture.

Open market forums are characterized by dynamic and unique interaction mechanisms, where traders rely on instantaneous information exchange through posts and comments, often marked by speed and openness. The information cycle typically begins with a news item, rumor, or technical analysis posted by a member, quickly attracting responses or quotes from other members. These posts may be supported by partial data, screenshots from trading screens, or even links to external media reports.

One prominent feature of these forums is the ability of information to spread virally, especially if it comes from a member with a strong presence or perceived insider knowledge of the market. In just minutes, an idea or rumor can become a main discussion topic attracting hundreds of responses and influencing individual traders' decisions. Sometimes, motivational or cautionary phrases are used to grab attention, such as "Watch out for Hail Cement stock" or "A golden opportunity is coming," increasing the psychological momentum around a specific stock or sector.

However, these forums often lack mechanisms for verifying the accuracy of information. The principle of "personal trust" prevails, where a member's credibility is assessed based on their previous history in the forum rather than on official sources. This makes it a fertile environment for the spread of rumors or analyses based on personal impressions. Additionally, some members may post information intending to influence the market, whether for speculative reasons or personal motives. For this reason, regulatory bodies always emphasize the need to rely on official data and not make investment decisions based on undocumented information. Nevertheless, open market forums remain a living mirror of the market pulse and individual investors' trends in Saudi Arabia.

Popular culture plays a pivotal role in shaping trading terms in the Saudi market, with terms like "whales" emerging as examples of linguistic adaptation to financial reality. The word "whales" is inspired by the marine world, referring to large, dominant creatures, and is likened to major traders or influencers in the market. Over time, this term has become part of the daily vocabulary of traders, indicating those with experience or those believed to have the ability to move prices.

These terms have transitioned into open market forums, where some members are referred to as "whales" in appreciation of their expertise or market knowledge. This has led to the emergence of a digital social hierarchy within the forums, where some members enjoy greater trust, and their opinions and analyses are followed even if not based on official sources. This dynamic enhances the rapid spread of information but simultaneously increases the risks of errors or rumors.

Popular culture is also reflected in borrowing terms from everyday life or popular proverbs, such as "the train has left" or "the market is on fire," to describe market conditions. This popular language facilitates communication among different segments of traders but can sometimes create exaggerated perceptions about the capabilities of certain individuals or the inevitability of certain trends. Ultimately, popular terms, led by "whales," are an integral part of Saudi trading identity and play a central role in shaping discussions within open market forums.

Open market forums have a clear impact on individual investors' behavior in the Saudi financial market, contributing to the rapid formation of trends and investment decisions. This influence often manifests in sudden buying or selling waves experienced by certain stocks, especially those whose news or analyses are heavily discussed in the forums. For example, active discussions about a company like Hail Cement can lead to a noticeable increase in trading volume on the stock within a short period, even in the absence of significant official news.

A wide segment of individual traders relies on the information circulated in these forums, either due to a lack of experience or in search of quick profit opportunities. This tendency to depend on unofficial opinions can lead to investment decisions that are not based on sound scientific foundations or accurate financial analysis. On the other hand, the psychological momentum resulting from collective interaction amplifies certain trends, such as collective optimism towards a particular stock or collective aversion due to negative rumors.

Behaviorally, these forums create an environment dominated by herd behavior, where the majority of members follow unofficial signals or recommendations without sufficient verification of their accuracy. Local market studies have shown that trading volumes on some small to medium stocks significantly increase after news about them spreads in open market forums, even if there are no financial indicators supporting those movements. For this reason, financial authorities always recommend exercising caution and not relying entirely on what is discussed in forums, but rather basing decisions on official financial analysis and reliable reports before making any investment decision.

The cement sector in Saudi Arabia has witnessed several instances where open market forums have been the focal point of intense discussions that indirectly affected stock movements. Among the most notable examples are the recurring discussions about stocks of companies like Hail Cement, Tabuk Cement, and Northern Cement. During financial result announcements or reports on infrastructure projects, forums often circulate unofficial news about profit expectations or distribution plans, prompting some individual investors to make quick decisions.

For example, following Hail Cement's announcement of a 10% cash dividend for 2023, forums witnessed intense discussions about the sustainability of these distributions and the potential for the stock to rise as a result. This led to a noticeable buying wave on the stock in the following days, despite the absence of official news about significant changes in the company's performance. Similarly, during periods of rising energy prices or government announcements of new infrastructure projects, analyses and expectations about the most benefiting companies spread, and stocks in the cement sector are often traded heavily as a result of these discussions.

It is worth noting that these effects are often temporary, as prices tend to stabilize after the psychological momentum fades or official data is released that refutes or confirms rumors. Nevertheless, open market forums remain a fertile environment for gauging market sentiment and individual investors' reactions, making them an unofficial indicator of trading trends in the Saudi market. Therefore, it is always emphasized to handle the information circulated in these forums with caution and not to make significant investment decisions based on rumors or unverified analyses.

Although open market forums represent a rich source of quick information and market reactions, relying entirely on what is presented in them carries significant risks for individual investors. The first of these risks is the spread of rumors and unverified information, as any member can post news or predictions without an official source, leading to misleading followers and prompting them to make incorrect investment decisions. In many cases, rumors about mergers, dividends, or management changes that were not true have been raised, causing short-term price movements that quickly reversed once the truth emerged.

Secondly, these forums are fertile ground for the phenomenon of "conflict of interest," where some members may post analyses or signals intending to influence prices for personal gain. For example, one might promote a particular stock before executing a large sale or post inaccurate warnings to drive others to sell at low prices. This behavior exposes less experienced investors to significant risks, especially in small or illiquid stocks like Hail Cement.

Thirdly, open market forums lack any form of oversight or official regulation, making them a fertile ground for disseminating misleading or incorrect information without accountability. For this reason, the Saudi Capital Market Authority continuously emphasizes the importance of relying on official sources and analyzing documented financial data before making any investment decision. Ultimately, these forums remain part of the trading ecosystem, but they can never replace objective analysis and consultation with licensed financial advisors.

The cement sector in Saudi Arabia is one of the strategic sectors, playing a key role in infrastructure projects and urban development within Vision 2030. The total annual production capacity of Saudi cement factories is approximately 70-75 million tons, with stable local demand between 60-65 million tons annually, while the surplus is exported to external markets such as the Gulf and Yemen. The market includes several major companies such as Saudi Cement Company (2120), Yamama Cement (2121), and Northern/City Cement (3006), in addition to medium and small companies like Hail Cement (3001) and Tabuk Cement (6060).

The competitive environment in the sector is characterized by relative protection from foreign competition, as government policies sometimes impose export restrictions or fees to ensure local demand is met first. However, competition among local companies remains strong, especially in areas where distribution lines intersect. For example, Hail Cement competes directly with Northern Cement and Tabuk Cement in the northern region of the Kingdom, while facing indirect competition from companies in Riyadh and Yamama in the central region.

Legislatively, cement companies are subject to periodic monitoring by regulatory bodies such as the Ministry of Industry and the Capital Market Authority. Current regulations include new environmental standards, such as initiatives to reduce carbon emissions and low-carbon cement experiments in collaboration with Aramco. These trends drive companies to invest more resources in developing production lines and enhancing energy efficiency. While government policies have remained generally stable, any future changes in energy prices or quality standards could significantly impact companies' profit margins, highlighting the importance of continuously monitoring regulations and sector developments.

Hail Cement Company (symbol: 3001) is a suitable example for understanding the impact of open market forums on medium and small stocks in the Saudi market. According to recent financial data, the stock price was approximately 9.20 SAR at the end of the third quarter of 2024, with a market value ranging between 800 and 900 million SAR, making it relatively small in the sector. The price-to-earnings ratio stabilized between 8 and 12 times, and the company strengthened its position through annual cash distributions of 10% of capital in 2023 (about 0.20 SAR per share), with a distribution yield of approximately 2.2%.

In terms of financial results, the company recorded operating revenues between 500 and 550 million SAR in 2023, with a net profit of about 50 million SAR. The total assets of the company were approximately 1.5 billion SAR, with significant investments in manufacturing facilities and inventory. Despite rising operational expenses due to increased energy prices, the company managed to maintain reasonable profit margins and continued its distribution policy.

These data reflect the relative stability in the company's performance, especially in light of regional competition and legislative changes. The experience of Hail Cement illustrates how discussions in open market forums can influence trading volume and investment behavior towards the company's stock, particularly when news about profits or distributions is released. Conversely, this experience emphasizes the importance of following official financial reports and documented data before making any investment decision and avoiding reliance on rumors or unofficial predictions circulating in forums.

The Saudi cement sector occupies a pivotal position in the local economy, with companies competing with varying production capacities and overlapping geographical markets. In this context, Hail Cement Company is a medium-sized player compared to sector giants like Saudi Cement Company (2120) and Yamama Cement (2121). While the market value of major players reaches several billion SAR, Hail Cement's value ranges between 800 and 900 million SAR according to 2024 data.

Competition in the northern and central regions is characterized by the presence of companies like Northern/City Cement and Tabuk Cement, which serve the same markets targeted by Hail, making price competition and market share more intense. All companies are also affected by demand fluctuations resulting from government housing and infrastructure projects, where sales significantly increase during urban boom periods and then stabilize as these projects conclude.

In recent years, new challenges have emerged, such as rising fuel and energy costs, prompting companies to seek solutions to enhance efficiency and reduce operational costs. Companies have also competed to offer attractive cash distributions to attract individual investors, with Hail Cement maintaining consistent annual distributions ranging between 8% and 10% of capital. Conversely, Hail's strategic location in the northwest provides the company with the flexibility to target areas with less presence of major competitors, giving it a margin of pricing and distribution flexibility. Ultimately, competition in the sector remains strong, requiring medium companies like Hail to continuously monitor technological and regulatory developments to maintain market share and enhance profitability.

During 2024 and 2025, Hail Cement Company did not experience dramatic developments or significant changes in ownership structure or management. The main news focused on quarterly business results, revealing moderate growth in sales and net profits, with an annual net profit of about 50 million SAR in 2023, approximately half of Saudi Cement Company's profits for the same period. The company continued its annual dividend distribution policy, enhancing investor confidence in its financial stability.

At the sector level, all cement companies were affected by a gradual rise in energy prices due to government measures to reduce subsidies on industrial fuel, prompting managements to adopt energy conservation programs and improve production efficiency. In this context, Hail Cement launched a program to develop technical and managerial staff, aiming to increase productivity and innovation without current geographical expansion.

Regarding regulations, no significant regulatory amendments were issued during the second half of 2024, but companies closely monitor initiatives from the Saudi Standards, Metrology and Quality Organization regarding new concrete standards. These standards are expected to require additional investments in production lines, which Hail Cement discussed in joint workshops with the organization. On the infrastructure project front, the government continued to support massive housing projects, maintaining stable local demand for cement. These developments reflect a relatively balanced sector, where medium companies like Hail have sustainable growth opportunities, provided they keep pace with technological and environmental developments.

Government policies play a crucial role in directing the Saudi cement sector, whether through supporting infrastructure projects or through new environmental regulations. In recent years, the Kingdom has launched massive initiatives under Vision 2030, such as the NEOM project, Qiddiya, and the Red Sea Project, which have increased local demand for cement and accelerated production rates among companies. At the same time, the government has gradually moved to lift subsidies on energy prices, posing new challenges for manufacturers in controlling costs.

On the environmental front, Saudi Arabia has begun implementing stricter carbon emissions standards in heavy industries, including cement production. Low-carbon cement experiments (Blue Cement) have been launched in collaboration with Aramco and international partners, aiming to reduce the environmental footprint and fulfill the Kingdom's commitments to international climate agreements. These policies drive companies to invest in developing more efficient production lines and using clean or alternative energy sources whenever possible.

For companies like Hail Cement, these developments represent both a challenge and an opportunity. They are required to maintain profit sustainability and shareholder distributions while complying with new environmental standards. For this reason, the company is observed to be focusing on improving energy efficiency and developing human resources to ensure adaptation to changes. Overall, government policies and environmental initiatives reflect a trend towards a more sustainable cement sector while maintaining the competitiveness of local companies in both local and regional markets.

Navigating open market forums presents both challenges and opportunities for individual investors in the Saudi market. On one hand, these forums provide a quick pulse of the markets and allow investors to access diverse perspectives and technical analyses that may not be available in official sources. On the other hand, they carry high risks, as rumors and unverified information can spread, potentially leading to hasty or incorrect investment decisions.

The first lesson to grasp is the necessity of verifying any information presented in forums by referring to official sources, such as the Tadawul website or the financial reports published by companies. Secondly, investors should develop their financial and technical analysis skills independently, rather than solely relying on recommendations or predictions from forum members, even if they appear experienced or widely trusted. Thirdly, it is important for investors to recognize that short-term market movements, especially in small stocks like Hail Cement, may be influenced by discussions circulating in these forums, but they often stabilize based on actual financial fundamentals.

Finally, it is always advisable to establish a clear investment plan based on personal financial goals rather than on immediate market reactions or the influence of forum momentum. In case of any doubts or knowledge gaps, it is preferable to consult a licensed financial advisor before making any investment decision. In this way, investors can benefit from the information circulated in open market forums without falling into the trap of rumors or emotional decisions.