The TASI Index is the primary indicator measuring the performance of the Saudi stock market (Tadawul) and is considered a fundamental tool for tracking the financial market movements in the Kingdom. Launched in the 1990s, the TASI Index is calculated based on the market capitalization weighted of all listed companies in the main market, making it an accurate measure of the health of the Saudi financial market. In the first 100 words of this article, we highlight the importance of the TASI Index as a comprehensive indicator reflecting economic and financial transformations not only at the company level but also at the national economy level of the Kingdom of Saudi Arabia.
In recent years, the TASI Index has become a focal point for both local and international investors, especially with significant changes in the Saudi economy under Vision 2030, increased liquidity and trading, and legislative and regulatory developments in the market. The TASI Index includes over 200 companies from various economic sectors such as banking, energy, petrochemicals, telecommunications, real estate, and insurance, reflecting the performance of these sectors comprehensively. This article provides a detailed analysis of the index's evolution, its components, influencing factors, comparisons with other indices, and answers to frequently asked questions from investors, adhering to educational principles and informational neutrality, without providing any investment recommendations.
Definition of TASI Index and Its Key Characteristics
The TASI (Tadawul All Share Index) is the benchmark index for the Saudi stock market, measuring the performance of all companies listed in the main market. The TASI is calculated using a market capitalization weighted mechanism, meaning that each stock's impact on the index is proportional to its market value and the number of free-floating shares available for trading. The index was introduced in the 1990s as a step to enhance market transparency and enable investors to easily measure the overall market performance.
The TASI is characterized by its comprehensiveness, as it does not limit itself to a specific sector or group of companies but includes all economic sectors in the Kingdom. The components of the index are updated periodically to reflect the latest market changes, such as the listing of new companies or the delisting of existing ones. The weights of companies within it are also reviewed according to changes in their market values and trading volumes.
The TASI represents the primary benchmark for measuring market health and is used to compare the performance of investment portfolios and mutual funds against the overall market performance. It is also a necessary tool for tracking developments in the Saudi economy, especially given the correlation between the performance of listed companies and the state's economic policies and global changes such as oil prices and foreign capital flows.
Recent Performance Trends of TASI Index
In recent years, the TASI Index has recorded notable transformations reflecting economic changes in the Kingdom and the region. By the end of 2024, the index closed at 12,037 points, marking its highest annual level since 2005. The index experienced a surge in the first quarter of 2024, followed by fluctuations for the remainder of the year, with a slight increase of 0.6% from the end of 2023 levels. At the beginning of 2025, the index declined by approximately 7.2% in the second quarter, before stabilizing around 11,000–11,500 points in mid-2025.
The movements of the index are linked to several factors, most notably global oil prices, changes in economic policies in the Kingdom, and shifts in global investment flows. Additionally, high liquidity in the market has played a role in supporting the index, with average daily trading volumes reaching 12–15 billion riyals during 2024. The increased openness of the market to foreign investments and adjustments to foreign ownership ratios have further enhanced liquidity and trading activity.
These developments demonstrate the sensitivity of the TASI to local and global events, highlighting the importance of following financial and economic news to understand the index's movements.
Calculation Method of TASI Index and Impact of Market Weights
The TASI Index is calculated based on the market capitalization weighted of the free-floating shares of each listed company. This method means that companies with larger market capitalizations and higher trading volumes have a greater impact on the index's movements. Therefore, an increase or decrease in the stock price of a major company like Saudi Aramco or one of the large banks can lead to significant changes in the overall index value.
The weights of companies in the TASI change with fluctuations in their market values and the number of free-floating shares available for trading. Periodic reviews of the weights are conducted to ensure the index accurately represents the actual market performance. The inclusion of new companies or the exit of companies from the market also affects the composition of the index and its internal weights.
This methodology makes the index sensitive to the movements of leading companies, which explains why financial analyses focus on the news and earnings of major companies when interpreting TASI's movements.
Key Sectors Listed in TASI Index and Their Roles
The TASI Index features significant sectoral diversity, including over 200 companies from various economic sectors, but certain sectors dominate the index's weight and play a crucial role in its movements:
1. Banking and Financial Services Sector: Includes major banks such as National Commercial Bank, Al Rajhi, Riyad, and Al Jazeera. These banks are among the largest companies by market capitalization, and their regular profits significantly impact the index.
2. Energy and Petrochemical Sector: Includes Saudi Aramco, SABIC, and other petrochemical and energy companies. Global oil price movements and local production plans directly affect this sector's performance and, consequently, the overall index.
3. Industrial Sector (Petrochemicals and Cement): Companies like SABIC, Al-Muwasat, Saudi Electricity, and Southern Cement. The performance of these sectors depends on both local and global demand and benefits from major industrial projects under Vision 2030.
4. Telecommunications and Information Technology Sector: Leading company STC, along with others. This sector benefits from digital transformation and significant investments such as NEOM projects.
5. Other Sectors: Include insurance, real estate, renewable energy, healthcare, consumer goods, and more. While their weight in the index is lower, they contribute to risk diversification and enrich the market.
This diversity enhances the index's stability over the long term but makes its performance sensitive to movements in major sectors, especially energy and banking.
Role of Leading Companies in TASI Index
Leading companies play a pivotal role in determining the direction of the TASI Index due to their large market weights and their impact on the Saudi economy as a whole. Among these companies, Saudi Aramco stands out, possessing the largest market capitalization in the market and significantly influencing the index, especially with changes in oil prices and production policies.
Similarly, major banks like National Commercial Bank and Al Rajhi represent a substantial portion of the index's value, as their financial results and quarterly profits reflect changes in monetary policy, interest rates, and local financing demand. Other companies like SABIC (petrochemicals) and STC (telecommunications) also contribute to supporting the index's weight.
The performance of these companies often serves as an early indicator of economic changes in the Kingdom, which is why analysts and investors pay special attention to their financial reports and strategic news.
Analysis of Factors Influencing TASI Index Performance
The TASI Index is influenced by several local and global factors that make its movement dynamic:
- Global Oil Prices: Given the Saudi economy's heavy reliance on oil, any fluctuations in oil prices directly reflect on the profits of major companies like Aramco and SABIC, and consequently on the overall index.
- State Economic Policy: Government spending plans, Vision 2030 projects, and infrastructure spending affect companies' profitability and expansion, thus impacting the index.
- Interest Rates: Rising interest rates affect banks' profits and market liquidity, potentially leading to a decline in investment demand.
- Foreign Investment Flows: Adjustments in foreign ownership ratios or the inclusion of Saudi stocks in global indices like MSCI enhance liquidity and influence the index.
- Global and Regional Events: Geopolitical conflicts, changes in the global economy, and international sanctions play a role in directing the index's movement upward or downward.
These factors make it essential for investors to closely monitor local and global news to analyze the index's movements scientifically.
Key Financial Indicators for TASI Index
The key financial indicators for the TASI Index are important tools for analyzing market attractiveness and assessing its level:
- Price-to-Earnings Ratio (P/E): The average P/E ratio for TASI in 2024-2025 was around 20-25 times, with variations among sectors. Banks typically have a lower P/E, while energy and industrial sectors are higher.
- Dividend Yield: The dividend yields for the index ranged around 3-4%, supported by dividends from major companies.
- Revenue and Profit Growth: Market reports estimated the growth of listed companies' profits between 0% to +5% in 2024, with revenue growth of 5-10%, varying by sector.
- Market Capitalization: By the end of 2024, the market capitalization of listed stocks exceeded trillions of riyals, driven by the performance of leading companies.
- Trading Volume: The average daily trading volume reached 12–15 billion riyals, reflecting high liquidity and increasing the market's attractiveness to local and foreign investors.
These indicators are key tools for monitoring market health and making data-driven decisions without being direct investment recommendations.
Comparison of TASI Index with Other Indices Locally and Globally
Although TASI is the benchmark index for the Saudi stock market, there are other indices that investors compare it with:
- Nomu Market: Previously a parallel market for small and medium-sized companies, it merged with the main market in 2023. Investors continue to monitor the performance of companies that were listed there compared to the market average.
- MSCI Saudi Index: An international index that mirrors the performance of Saudi stocks for foreign investors, and the inclusion of Saudi stocks in it affects the volume of foreign investment flows.
- Regional Indices: Such as the Abu Dhabi General Market Index, the Kuwait Index, and the Casablanca Index in Morocco. These indices reflect markets in oil-dependent economies linked to Saudi Arabia, and investors compare their performance with TASI.
- Global Indices: Such as the Dow Jones and S&P 500, where some investors compare emerging market performance with advanced markets.
These comparisons help determine the attractiveness of the Saudi market and measure its relative performance, especially with increasing regional and international economic integration.
Importance of Liquidity and Trading in Supporting TASI Index
Liquidity and trading volume are vital factors that support the stability and strength of the TASI Index. The average daily trading volumes in 2024 ranged between 12 and 15 billion Saudi riyals, reflecting high interest from local and foreign investors.
Liquidity facilitates buying and selling operations and reduces price differentials, encouraging new companies to list in the market. High liquidity also increases market efficiency and makes it more resilient to fluctuations, allowing traders to execute their orders quickly without significantly impacting prices.
Additionally, the market witnessed a growth in the number of daily transactions by over 10% during 2024 compared to 2023, driven by regulatory reforms and opening the door to foreign investors. This growth in liquidity and trading enhances the attractiveness of the Saudi market as a regional financial hub.
Recent Developments and News About TASI Index in 2024-2025
The TASI Index and the Saudi financial market have witnessed significant developments between 2024 and 2025:
- The merger of the Nomu market with the main market, which increased the number of listed companies and diversified the index.
- Continued economic reforms under Vision 2030, with the launch of massive projects such as NEOM and the Red Sea, positively impacting companies linked to infrastructure and renewable energy.
- Improvement in financial technologies, such as automated trading and increased regulatory transparency, attracting new categories of investors.
- Quarterly financial reports showed variations in sector performance, with energy companies outperforming while some financial sectors declined due to rising interest rates.
- Adjustments in market policies, such as reducing trading sessions during Ramadan and reviewing lending and margin ratios to protect investors.
- The market was affected by global factors such as oil price fluctuations and rising interest rates in the U.S., leading to partial capital outflows and changes in stock prices.
These events reflect the dynamism of the Saudi market and the importance of continuously monitoring developments.
How to Monitor TASI Index Performance and Available Tools
Investors can monitor TASI Index performance through several official and reliable sources:
- The official Tadawul website (https://www.saudiexchange.sa/) provides real-time data on the index value, its components, and market movements.
- Financial news platforms such as Argaam, which publish daily reports and analyses about the market and the index.
- Smartphone applications from banks and brokerage firms, which provide data for technical and fundamental analysis.
- Electronic trading platforms that allow monitoring of index movements and executing buy and sell orders directly.
These tools assist investors and observers in making decisions based on real data and scientific analysis, while emphasizing the importance of consulting a licensed financial advisor before making any investment decisions.
Challenges and Opportunities for TASI Index in the Future
The TASI Index faces several challenges and opportunities as the Saudi economy continues to evolve:
- Challenges: Dependence on oil prices, fluctuations in the global economy, changes in global monetary policies, and geopolitical influences. Additionally, competition from regional and emerging markets may affect the attraction of foreign investments.
- Opportunities: Continued Vision 2030 projects and the expansion of non-oil sectors, the listing of new companies, and rising liquidity and trading volumes. The digital transformation and regulatory environment development attract more local and international investors.
With increasing investment awareness and market development, the TASI Index is expected to remain a key tool for tracking the performance of the Saudi economy, with the necessity of continuous monitoring of regulatory and economic changes.
TASI Index and Exchange-Traded Funds (ETFs)
Exchange-Traded Funds (ETFs) provide investors with the opportunity to invest in a basket of stocks that reflect the performance of the TASI Index without the need to purchase each stock individually. These funds are traded in the market like stocks and offer investors diversification and a reduction in risks associated with investing in a single company.
ETFs are a suitable tool for those wishing to track the overall market performance or those looking to diversify their investment portfolios automatically. Some of these funds also provide dividend distributions that align with the dividends distributed by the companies constituting the index.
Despite their advantages, investors should understand how these funds operate, their fees, and their alignment with their investment goals, emphasizing the importance of consulting a licensed financial advisor to make the right decision.
Conclusion
The TASI Index serves as a mirror reflecting the economic and financial state of the Kingdom of Saudi Arabia, combining the performance of hundreds of companies from various sectors and translating it into a single figure that represents the strength of the Saudi financial market. By following the TASI, investors and observers can understand market dynamics, liquidity changes, and analyze the impacts of local and global economic factors.
This article addressed the definition of the TASI Index, its calculation method, the influential sectors and companies, key financial indicators, challenges and opportunities, and the latest developments in the market. We also highlighted the importance of liquidity, index funds, and daily monitoring tools. With all this information, it remains crucial to emphasize that investing in financial markets carries risks and requires careful study and deep understanding.
SIGMIX recommends consulting a licensed financial advisor before making any investment decisions in the Saudi stock market or any of its financial instruments, while keeping track of regulatory and economic changes for a clear and safe vision. For more analyses and market monitoring tools, you can visit the SIGMIX platform and benefit from its educational and interactive content.
Frequently Asked Questions
The TASI Index is the primary index that measures the performance of all companies listed in the Saudi stock market (Tadawul). The index reflects the general market movement: its rise often indicates an increase in the prices of most stocks, while its decline indicates a market downturn. The TASI can be used as a benchmark to compare the performance of investment portfolios or mutual funds against the overall market, and some exchange-traded funds (ETFs) use it to track the performance of the Saudi market comprehensively.
The TASI Index is calculated based on the market capitalization weighted of the free-floating shares of each listed company. The index value is calculated by summing the market values of all listed companies, with each company having a weight proportional to its value and the number of shares available for trading. This means that any change in the stock price of a large company like Saudi Aramco or major banks will have a greater impact on the index's movements.
The banking (banks), energy (Aramco and SABIC), petrochemicals, and telecommunications sectors are among the most influential in TASI due to their large market weights. Saudi Aramco is the largest weighted company, followed by major banks like National Commercial Bank and Al Rajhi, along with companies like SABIC and STC.
Given that the Saudi economy heavily relies on oil, global oil prices play a key role in influencing the TASI Index. Rising oil prices support the profits of energy companies and elevate the index, while falling prices reduce the profits of major companies, often leading to a decline in the index.
The TASI Index is the official and most comprehensive index for the Saudi stock market, including all companies listed in the main market. Nomu was a parallel market for small and medium-sized companies before merging with the main market. The MSCI Saudi Index is an international index that includes a selection of Saudi stocks and is used as a reference for foreign investment funds.
You cannot purchase the TASI Index directly as it is not a financial asset or a tradable security. However, you can invest in exchange-traded funds (ETFs) that track the performance of TASI or buy shares of the companies listed in it individually or through mutual funds.
You can monitor the performance of the TASI Index in real-time through the official Tadawul website (https://www.saudiexchange.sa/), in addition to financial news platforms like Argaam and banking and brokerage applications. These sources provide real-time data on the index and the movements of its constituent stocks.
In addition to oil prices, factors such as global interest rates, fluctuations in international financial markets, foreign capital flows, political and geopolitical changes in the region, and the overall performance of the Saudi economy directly or indirectly impact the TASI Index.
The TASI Index itself does not pay any dividends or distributions as it is not a company or financial asset, but merely a measure. However, the companies listed within TASI distribute dividends to their shareholders, and exchange-traded funds that track TASI can distribute these dividends based on the weights of the constituent companies.
The P/E ratio for the index is calculated by dividing the total market capitalization of all companies listed in TASI by their total annual earnings. This figure provides the average P/E ratio of the market, which is used as an indicator to assess the market's valuation relative to its actual earnings.
Investing in the stock market involves risks and challenges related to price fluctuations and economic factors. It is important to consult a licensed financial advisor for scientific analysis, risk assessment, and to determine the appropriate strategy for your financial goals and investment circumstances, while keeping track of regulatory and economic developments in the market.