Global Indicators: Comprehensive Analysis and Impact on the Saudi Financial

Global indicators serve as benchmark tools that measure the collective performance of a group of stocks listed in major financial markets worldwide. For instance, the S&P 500 reflects the performance of the largest 500 companies listed in the United States, while the FTSE 100 measures the performance of the largest 100 companies on the London Stock Exchange. Other prominent indicators include the Dow Jones Industrial Average (DJIA), the German DAX, and the Japanese Nikkei. The importance of these indicators lies in their ability to provide a comprehensive picture of investor sentiment, economic trends, and risk levels in the markets. They are used as a benchmark for comparison by investors, investment funds, and exchange-traded funds (ETFs), and help measure the return on investment for financial portfolios. Furthermore, global indicators play a crucial role in determining capital flows between emerging and developed markets; for example, if U.S. market indicators rise, they are often seen as a sign of global economic strength, prompting some investors to inject more funds into emerging markets in search of higher returns. Conversely, a decline in global indicators may increase anxiety and lead to capital outflows from emerging markets to safe havens. Thus, understanding global indicators is essential for anyone following financial markets due to their direct and indirect effects on stock movements, currencies, commodities, and even macroeconomic policies.

The Saudi financial market (Tadawul) is characterized by its unique size, liquidity, and structural connection to the national economy, yet it does not operate in isolation from global indicators. Fluctuations in indicators such as the S&P 500 or FTSE 100 often reflect on the sentiment of Saudi investors, especially with the increasing rates of foreign investment in the Saudi market in recent years. When global indicators experience performance increases or stability, foreign capital inflows into the Saudi market are often observed in search of diversified returns. Conversely, during periods of decline or global financial crises, such as those that affected markets in 2008 and 2020, the Saudi market often suffers negatively due to liquidity outflows and decreased investor confidence. On the other hand, global commodity indicators, particularly oil prices, directly impact listed Saudi companies, as the national economy heavily relies on oil revenues. For instance, a rise in the global Brent crude index positively reflects on the stocks of Saudi energy and petrochemical companies, while a decline exerts pressure on the entire sector. In recent years, the inclusion of the Saudi market in global indicators such as MSCI for emerging markets has increased its correlation with global market fluctuations, and both local and international investors closely monitor global indicator developments to anticipate their reflections on Tadawul. However, the local market retains its own dynamics linked to major national projects, government policies, and the size of public spending.

Several key global indicators are closely monitored by Saudi investors due to their actual impacts on various market sectors. Foremost among them is the U.S. S&P 500 index, which reflects the performance of the world's largest companies and serves as an indicator of global economic health. The Dow Jones Industrial Average is also an important indicator, particularly for large industrial and financial companies. From Europe, the British FTSE 100 and the German DAX stand out, reflecting the performance of the largest companies listed in Western European markets. The Japanese Nikkei and emerging market indicators such as MSCI Emerging Markets cannot be overlooked. In the Saudi context, there is particular importance attached to global commodity price indicators, led by the Brent crude oil index, as well as indicators for metals and petrochemicals. For example, fluctuations in the S&P 500 index in 2024 were linked to changes in oil and dollar prices, which in turn reflected on the TASI index and energy stocks. Additionally, the performance of Asian markets, especially China and India, impacts global demand for oil and petrochemicals, and thus key sectors in the Saudi market. Therefore, local and international investors are keen to regularly monitor these indicators to make decisions based on global trends.

The TASI index (TASI) is the main benchmark for the performance of the Saudi financial market, encompassing all companies listed in the main market. In November 2023, TASI closed at 11,244 points, reflecting a relative recovery compared to previous periods of volatility. During 2024 and 2025, TASI continued to be influenced by global developments such as oil prices and major stock markets, alongside significant local projects like Vision 2030 and the NEOM and Qiddiya projects, as well as Aramco's expansions. The inclusion of the Saudi market in global indices like MSCI for emerging markets has added another dimension to TASI's importance, as foreign investors now monitor it as part of their global portfolios. Consequently, TASI's movements are increasingly linked to the performance of global indicators, evident in its reactions to waves of rises and falls in U.S. and European markets. However, local factors continue to affect the index, such as government policies related to spending and economic stimulus, oil market developments, and the performance of leading companies in the market. Thus, analyzing TASI requires a dual perspective that combines an understanding of global indicators with an understanding of the local context, especially as the Kingdom continues its efforts to diversify income sources and attract foreign investments.

The impact of global indicators on the sectors of the Saudi market varies according to the nature of each sector and its degree of connection to the global economy. The energy sector, particularly petrochemical companies, is directly affected by oil prices and relevant global indicators, such as the Brent crude index and major oil company indicators. For instance, any rise in oil prices due to movements in global energy markets positively reflects on the stocks of Aramco, SABIC, and related companies, while a decline in prices leads to selling pressures. The banking sector is also affected by global capital movements and international interest rates, as tightening monetary policies in the U.S. and Europe often reflect on the cost of financing in the Kingdom. The telecommunications and technology sector benefits from upward trends in global tech stock indices, especially with the increasing importance of digital transformation in Saudi Arabia. Meanwhile, the basic materials sector, including cement companies like SIGMIX, is directly affected by government spending on major projects, which in turn is linked to the stability of the global economy and oil prices. During periods of global prosperity, the pace of projects increases, leading to higher demand for cement and construction materials, while it declines during times of crises. Finally, sectors such as insurance and retail are influenced by changes in commodity prices, international monetary policies, and global consumer confidence levels, making monitoring global indicators essential for analyzing the performance of these Saudi sectors.

The cement sector in Saudi Arabia is one of the essential sectors that is indirectly affected by fluctuations in global indicators, particularly through oil prices and the level of government spending on developmental projects. SIGMIX, listed on Tadawul within the basic materials sector, exemplifies this interconnection. When global oil prices rise, the financial resources of the Saudi government increase, enhancing funding for massive infrastructure projects, thereby raising domestic demand for cement. Conversely, during periods of declining oil prices or global economic crises, the pace of projects often slows, leading to production surpluses and pressures on profit margins in cement companies. SIGMIX faced challenges in 2024 due to rising costs and relatively weak demand, and its financial results were affected by fluctuations in raw material and energy prices globally. On the other hand, the merger of SIGMIX with Qassim Cement Company provided an opportunity to restructure operations and benefit from economies of scale to cope with volatile market conditions. Ultimately, it is clear that the Saudi cement sector, despite its local nature, remains influenced by changes in global indicators, especially those related to energy prices and macroeconomic policies.

SIGMIX (Tadawul symbol: 3001) is one of the key companies in the materials sector of the Saudi market, and it has witnessed significant developments in 2024 on both financial and operational fronts. According to the latest data from Tadawul, the company's market value reached approximately 1.136 billion Saudi riyals, based on the number of outstanding shares and the latest available stock price. It is noteworthy that during the recent updates on the Tadawul platform, there was no visible stock price (recorded as '-'), possibly reflecting technical updates or a temporary halt in trading due to the acquisition deal with Qassim Cement. In terms of profitability, the company experienced a decline in profits during the first quarter of 2024, attributed to rising operational costs and a slowdown in demand for cement. The price-to-earnings (P/E) ratio for the company is undefined during certain periods due to operational losses, posing a challenge for traditional financial valuation. Regarding distributions, SIGMIX has not announced any dividends during 2024 and 2025, preferring to reinvest cash surpluses in merger and restructuring operations. These data reflect the reality of the sector amid global changes and highlight the importance of regularly monitoring the financial and operational developments of listed companies.

SIGMIX faces strong competition from several major cement companies in the Kingdom of Saudi Arabia, foremost among them Qassim Cement (3020), which announced a merger deal with SIGMIX in 2024. This merger is expected to reshape the competitive landscape in the sector by creating a larger and more financially robust entity capable of facing economic challenges. Other competitors include Riyadh Cement (3010), Eastern Cement (3002), and Southern and Northern Cement. These companies stand out due to their large production volumes and diverse target markets. Some of these companies have achieved higher profit margins due to stable demand in their geographical areas or operational efficiency. Meanwhile, SIGMIX has focused in recent years on improving operational costs, developing maintenance programs, and enhancing production efficiency. However, challenges such as oversupply, rising costs, and global market fluctuations remain significant. The entry of international companies or the expansion of local companies into new areas represents an additional challenge, especially as the Kingdom seeks to develop infrastructure and attract new investments. In this context, the importance of alliances and mergers emerges as a strategy to face competition and achieve financial sustainability.

In 2024, SIGMIX announced a merger and acquisition deal with Qassim Cement, reflecting the trend of Saudi companies toward enhancing efficiency and addressing market challenges. The deal is based on a stock swap principle, whereby SIGMIX's operations will transition to the larger and financially stronger Qassim Cement entity. This merger is expected to achieve cost savings, improve supply chains, and increase competitiveness against local and international companies. The deal comes amid pressures on the sector due to oversupply and a slowdown in demand during certain periods, in addition to rising operational costs resulting from fluctuations in raw material and energy prices. The company has reported significant progress in the merger procedures by mid-2024, with ongoing efforts to integrate systems and human and financial resources. From a regulatory perspective, completing the deal requires approval from regulatory authorities, in addition to the agreement of the shareholders of both companies on the merger terms. In the long term, this merger is expected to enhance the merged company's ability to seize opportunities in major projects proposed by the government under Saudi Vision 2030, while increasing the company's flexibility in facing global economic fluctuations.

The Saudi cement sector has witnessed significant events during 2024 and 2025, most notably the continuation of expansion programs and routine maintenance of major companies' plants, including SIGMIX. Rising prices of certain raw materials and energy globally have led to increased operational costs, prompting companies to adopt new strategies to improve efficiency and reduce capital expenditures. At the same time, the massive infrastructure projects launched by the Saudi government have supported local demand for cement, despite some slowdown resulting from global economic pressures. The market has seen mergers and acquisitions, such as that between SIGMIX and Qassim Cement, aimed at unifying resources and achieving economies of scale. Financial results have shown a decline in revenues and net profits for some companies in the first quarter of 2024, prompting management to reassess operational and investment plans. Globally, oil prices, inflation, and interest rates remain significant influences on the sector, as rising energy prices have exerted additional pressure on profit margins. Conversely, companies are making efforts to maintain operational sustainability by updating production lines and carbon emission reduction technologies. This reality underscores the importance of monitoring global indicators to understand the prospects of the Saudi cement sector in the coming years.

Oil prices and global commodity indicators play a central role in directing the movement of the Saudi financial market, given that the national economy primarily relies on oil revenues. When global oil prices rise, as seen in certain periods of 2024, government spending on infrastructure projects increases, enhancing demand for sectors such as cement, energy, and petrochemicals. Conversely, fluctuations in the prices of basic commodities such as iron, coal, and limestone lead to changes in production costs for basic materials companies, including cement companies. Recent data indicate that rising energy and raw material prices in 2024 have increased operational costs for SIGMIX and competing companies, necessitating a swift response through efficiency improvements and the adoption of modern technologies. Moreover, global oil prices influence foreign capital flows into the Saudi market, as periods of rising oil attract more foreign investments in search of higher returns in the local market. Overall, tracking oil and commodity price indicators is a fundamental step in analyzing the future of Saudi markets and their vital sectors.

Global monetary policies, particularly those adopted in the United States and Europe, have a direct impact on investment flows in the Saudi financial market. When the U.S. Federal Reserve or the European Central Bank raises interest rates to combat inflation, it often leads to a decrease in risk appetite among international investors, which reflects in reduced investments in emerging markets like Saudi Arabia. In 2024, the world witnessed a wave of interest rate hikes due to rising inflation rates, causing a portion of capital to shift to safe assets such as the U.S. dollar and government bonds, at the expense of stock markets. This change has affected sectors such as banking, which faced rising financing costs, as well as cyclical companies like cement firms that rely on long-term project financing. On the other hand, accommodative monetary policies (lowering interest rates or quantitative easing) lead to increased liquidity and foreign investment flows toward Saudi markets in search of higher returns. Thus, monitoring global monetary policies emerges as an influential factor in assessing opportunities and challenges in the local market, especially as Saudi Arabia continues to attract foreign investments under Vision 2030.

Saudi companies, especially in key sectors such as cement and energy, adopt a range of strategies to mitigate the effects of fluctuations in global indicators. Among the most prominent of these strategies is improving operational efficiency by updating production lines and adopting new technologies to reduce costs and increase productivity. Companies also seek to diversify revenue sources through exports to foreign markets or developing new products that meet local and international market needs. Amid rising global raw material prices, some companies are signing long-term contracts with suppliers or investing in alternative energy sources to reduce reliance on oil and gas. In terms of human capital, companies focus on developing local competencies and training employees to keep pace with technological and economic transformations. From a financial structuring perspective, the merger of smaller companies into larger entities, as seen between SIGMIX and Qassim Cement, is a strategic option to achieve economies of scale and enhance competitiveness. Finally, companies continuously monitor global indicators and update their strategies according to changes in international markets, in an effort to ensure sustainability and growth amid a volatile environment.

Although accurately predicting the future of financial markets is challenging, analyzing global indicators remains a crucial tool for outlining potential scenarios for the performance of the Saudi market. The future of the local market depends on several factors, most notably oil prices, global economic stability, and developments in international monetary policies. If oil prices remain at high levels, it is likely that Saudi government spending on major projects will continue, boosting demand for sectors such as cement, energy, and infrastructure. Conversely, if the world experiences an economic downturn or a new financial crisis, liquidity may be affected, and the pace of projects may slow, which will reflect on the performance of companies listed on Tadawul. On the other hand, the Kingdom's continued implementation of Vision 2030 and diversification of income sources will mitigate the impact of global fluctuations on certain sectors and provide new growth opportunities. Additionally, regulatory policies, such as the inclusion of the market in global indices, will continue to attract foreign investments and support market stability. In light of this, the importance of reading global indicators emerges as a fundamental step in understanding general trends and hedging against risks, with the necessity of consulting financial advisors before making any investment decisions.