Market: Everything You Need to Know About the Saudi Financial Market

The Saudi financial market (commonly known as Tadawul) is the central platform for trading securities in the Kingdom of Saudi Arabia. It was established to regulate the buying and selling of stocks, bonds, sukuk, and funds, and is supervised by the Capital Market Authority (CMA). Tadawul plays a pivotal role in the national economy, attracting both local and foreign capital and providing an effective financing channel for companies. The market has undergone significant development in its infrastructure, with the introduction of advanced electronic systems, an expansion of financial products, and the application of global best practices in disclosure and governance. Additionally, the Tadawul Group operates the market and develops its technological platforms, enhancing efficiency and boosting investor confidence. The importance of the Saudi market is highlighted by the massive market capitalization of listed companies and the diversity of sectors, making it a competitive regional financial hub.

The Capital Market Authority (CMA) is the highest regulatory authority for the financial market in Saudi Arabia. The authority is responsible for issuing regulations governing trading operations, protecting investor rights, and enhancing transparency and efficiency in the market. Among its key tasks are monitoring financial disclosures by listed companies, approving new financial products, supervising brokerage firms, and ensuring compliance with laws by all participants. In recent years, the CMA has worked on updating regulations to align with international standards, such as allowing direct foreign investment, implementing a T+2 settlement system, and developing anti-money laundering systems. The authority has also launched investor awareness campaigns and training programs for financial professionals, contributing to increased confidence and attractiveness of the Saudi market both locally and globally.

The Tadawul Group is the operator of the Saudi financial market and is itself listed in the market under the symbol 1111. The group manages the technological infrastructure for trading operations, oversees electronic services and settlement and clearing platforms, and works on developing market indices. Since its listing, the group has achieved revenue growth with increased trading activity and product expansion. Tadawul Group focuses on technological innovation, such as developing digital trading platforms and investor services, and launching new indices that include sustainability and industrial sectors. The company's revenues are directly linked to trading volumes and listing fees, making it a beneficiary of any increased market activity. Recently, Tadawul Group has shown strong financial results and profit growth, with a trend towards reinvesting profits in technological infrastructure development and enhancing market competitiveness both locally and internationally.

The Saudi financial market relies on a set of indices that measure overall and sectoral performance. Among the most prominent indices are:
- All Share Index (TASI): The benchmark index that includes all listed companies and reflects the overall market performance.
- MSCI Tadawul 30: Includes the largest 30 companies by liquidity and market capitalization, used as a gauge of the market's attractiveness to global investors.
- Sectoral Indices: Such as the Energy Sector Index, Basic Materials Index, Real Estate Investment Trusts (REITs) Index, and Banking Index.
At the beginning of 2025, the TASI index recorded levels between 10,500 and 11,000 points, while the MSCI Tadawul 30 reached approximately 1,406.86 points. These indices allow investors to monitor the market's overall performance and assist in making decisions based on specific sector movements. They also reflect the diversity of the Saudi market and the distribution of economic activity across multiple sectors.

The Saudi financial market includes diverse sectors such as energy, banking, basic materials, financial services, real estate, telecommunications, and manufacturing. Each sector comprises a number of listed companies that vary in size and activities. For example, the energy sector includes major companies like Saudi Aramco, while the banking sector is represented by institutions such as Al Rajhi Bank and the National Commercial Bank. The REITs sector has seen growth in recent years, benefiting from supportive regulatory policies. This diversity enhances the market's ability to absorb economic shocks and provides opportunities for various types of investors. Vision 2030 has contributed to sectoral diversity by supporting non-oil sectors and encouraging small and medium-sized enterprises to list in the market.

The Saudi financial market launched the Nomu market as a parallel platform aimed at facilitating the listing of small and medium enterprises. Nomu features less stringent listing requirements compared to the main market, allowing startups to access public financing and accelerate their growth. By the end of 2024, Nomu included over 90 companies and is witnessing increasing interest from companies seeking to broaden their shareholder base and enhance transparency. Nomu also provides investors with opportunities to explore high-growth potential companies, but it should be noted that liquidity and risks are higher than in the main market. Nomu integrates with the main market under the supervision of the CMA and is subject to regulatory rules that ensure investor protection while supporting innovation and renewal in the market environment.

In recent years, the Saudi financial market has witnessed several significant regulatory amendments. The most notable include allowing margin trading, introducing short selling mechanisms under specific conditions, and developing the T+2 settlement system. The list of permitted products has also been expanded, with the launch of new indices such as the Sustainability Index and the Industrial Index. The CMA has issued periodic updates to governance instructions, imposed more transparent disclosure standards, and launched initiatives to protect individual investors. These developments aim to enhance the market's competitiveness, attract foreign investments, and achieve the goals of Vision 2030 in transforming the Kingdom into a regional financial hub. These reforms have also contributed to increased trading volumes, ensured financial stability, and enhanced confidence in the Saudi market at both local and international levels.

The Saudi financial market does not only trade stocks but also offers a wide range of financial products, including:
- Stocks: Representing partial ownership in listed companies.
- Sukuk and Bonds: Debt instruments issued by companies or the government to raise financing.
- Real Estate Investment Trusts (REITs): Funds that invest in income-generating real estate assets.
- Exchange-Traded Funds (ETFs): Funds that track various indices or investment strategies.
- Financial Derivatives: Including futures and options, allowing hedging or benefiting from price fluctuations.
These products provide diverse options for investors and contribute to enhancing market liquidity and diversifying income sources for companies and investors. The market continues to develop new products that meet international standards and respond to the needs of local and foreign investors.

Tadawul Group (symbol 1111) is responsible for operating and managing the Saudi financial market. As of mid-2025, the stock price was approximately 166.60 SAR. The company's total market capitalization is estimated in billions of riyals, with a price-to-earnings (P/E) ratio of about 30 times, reflecting market expectations for profit growth in the medium to long term. By the end of 2024, the company had not announced any dividends (0% dividend yield), as its strategy focuses on reinvesting profits in technical expansion. Tadawul Group has recorded significant growth in net revenues and profits, supported by increased trading volumes and the number of listed companies. Its latest quarterly results showed revenue growth compared to the previous year, and this trend is expected to continue with product expansion and increased market activity.

Despite the absence of direct competition in the local market, the Saudi financial market faces strong regional and international competition. Tadawul competes with major exchanges in the Gulf, such as the Dubai Financial Market and the Abu Dhabi Securities Exchange, as well as global exchanges like NASDAQ and the London Stock Exchange in attracting capital and foreign investments. The Saudi market has strengthened its position by listing giant companies, adopting international standards, and launching innovative financial products. The connection with global indices such as MSCI and FTSE has also increased the flow of foreign investments. Tadawul continues to develop partnerships with global exchanges, update its technological infrastructure, and launch initiatives to enhance liquidity and attract global investors, thereby strengthening its competitiveness on the regional and international stage.

Vision 2030 represents the strategic framework that has driven significant transformations in the Saudi financial market. The vision focuses on diversifying the economy and reducing dependence on oil, which has reflected in supporting new sectors in the market and expanding the base of listed companies. The vision has encouraged the listing of government companies and privatization, opened the door to direct foreign investments, and pushed for the development of the market's technological infrastructure. It has also supported financial awareness programs and investment culture, and launched initiatives to enhance governance and transparency in listed companies. These efforts have made the Saudi market more attractive to global investors, increased its capacity to accommodate large national projects, and achieved long-term financial sustainability.

The Saudi financial market has witnessed growth in trading volume during 2024 and 2025, with annual trading values exceeding hundreds of billions of riyals. The number of companies listed in the main market has risen to over 220, in addition to about 90 companies in the parallel Nomu market. Sectoral indices were positive for the energy, basic materials, and banking sectors. The Energy Sector Index recorded a level of 4,563.40 points at the beginning of 2025, while the Basic Materials Index reached 5,167.50 points. These figures reflect the recovery of the national economy and increasing investor confidence. Strong financial results from companies have also supported the rise in overall market indices, especially with major companies announcing growth in revenues and profits.

Despite the wide opportunities provided by the Saudi financial market, investors face a range of risks that must be considered. The most prominent include fluctuations in oil prices that directly affect the performance of many sectors, in addition to economic and political risks in the region. There are also systemic risks such as legislative and technological changes that may impact trading operations. Individual company risks, such as poor management or financial crises, should also be noted. The CMA and Tadawul strive to mitigate these risks by updating regulations, enhancing transparency, and implementing strict governance standards. It is essential for any investor to carefully study risks, avoid relying on forecasts or rumors, and always refer to official sources.

Several official channels are available to monitor developments in the Saudi financial market. The official Tadawul website provides real-time data on stock prices and indices, as well as periodic reports on market performance and listed companies. The CMA publishes regulatory reports and warnings for investors, and provides explanations about financial products and updated regulations. Additionally, financial news platforms like Argaam and Bloomberg offer in-depth reports and analyses of the market. Investors can also follow company announcements through the disclosure portal on the Tadawul website and communicate with brokerage firms for weekly and monthly performance analyses and reports. These sources help in making decisions based on accurate and reliable information.

Before making any investment decision in the Saudi financial market, it is advisable to study the financial reports of companies, understand sectoral indices, and follow regulatory updates. Investors should diversify their investment portfolios to reduce risks and clearly define their time objectives. It is also crucial to use official platforms for obtaining information and avoid relying on rumors or unofficial forums. Consulting a licensed financial advisor is an important step to understand risks and analyze opportunities, especially for new investors. Finally, attention should be paid to broker fees, trading conditions, and changes in economic policies that may affect the market.