The Saudi Exchange, locally known as the Saudi Financial Market (Tadawul), is the official and sole platform for trading securities in the Kingdom of Saudi Arabia. Established as a joint-stock company in 2007, it has evolved into one of the largest exchanges in the Middle East in terms of market capitalization and number of listed companies. Under the supervision of the Capital Market Authority and in collaboration with the Securities Depository Center, the Saudi Exchange offers a range of financial products including stocks, sukuk, bonds, investment funds, and a parallel market (Nomu) dedicated to small and medium-sized enterprises.
The Saudi Exchange plays a pivotal role in the Saudi economy by providing a transparent and organized platform for trading securities, allowing for diverse investment opportunities for both local and international investors. In recent years, the market has witnessed significant developments, most notably the easing of foreign ownership restrictions, the listing of new companies, and the expansion of derivative products. The general market index (TASI) reflects the performance of all listed stocks, making it an important reference for monitoring the health of the Saudi economy.
In this comprehensive guide, we will delve deeply into the sections of the Saudi Exchange, key indicators, trading mechanisms, regulatory developments, and available opportunities, while considering the regulatory framework of the Capital Market Authority. Our aim is to provide educational and neutral content that helps you understand the Saudi market without offering direct investment advice.
Definition of Saudi Exchange and Its Role in the Saudi Economy
The Saudi Exchange is the official financial market in the Kingdom of Saudi Arabia, known locally as "Tadawul." It was established in its modern form in 2007 as a joint-stock company operating under the supervision of the Saudi Capital Market Authority. It is the only authorized entity for trading securities within the Kingdom, encompassing operations in stocks, sukuk, bonds, parallel markets (Nomu), and investment funds.
The significance of the Saudi Exchange lies in its role as the primary platform for financing Saudi companies through public offerings and capital increases, while providing mechanisms for individual and institutional trading in an organized and transparent manner. The general market index (TASI) represents the overall performance of the market and serves as a key reference for tracking the health of the Saudi economy, especially given the link between market performance, oil prices, domestic liquidity, and economic reforms under Saudi Vision 2030.
The Saudi Exchange continuously seeks to expand its investor base, develop financial products, and enhance transparency through advanced electronic trading systems. The Kingdom places great importance on attracting foreign investments, reflected in the easing of certain regulatory restrictions and the increase in new listings that enhance market depth and diversity.
Market Structure: Sectors and Key Indicators
The structure of the Saudi Exchange consists of the main market, the parallel market (Nomu), and the bond and sukuk market. The main market includes over 200 listed companies by the end of 2024, distributed across multiple sectors, notably energy, banking, insurance, industry, services, and telecommunications. The Nomu market is dedicated to small and medium-sized enterprises with lower listing requirements to encourage innovation and growth.
Key indicators used in the Saudi Exchange include:
- General Market Index (TASI): Reflects the performance of all companies listed in the main market.
- Sectoral indices: Such as the banking sector index, insurance index, basic materials index, and others.
- Nomu Index: Measures the performance of companies listed in the parallel market.
The Saudi financial market is characterized by its diverse sectors, with the energy and banking sectors holding the largest weight in the general index (TASI), while sectors like technology and healthcare are experiencing rapid growth rates. Sectoral indices provide an important tool for investors to monitor the performance of different sectors and assess market dynamics.
General Market Index (TASI): Its Implications and Historical Movement
The General Market Index (Tadawul All Share Index – TASI) is the main index in the Saudi Exchange, reflecting the performance of all stocks listed in the main market. TASI serves as a mirror of the Saudi economy's condition and capital movement, influenced by internal factors such as liquidity and government policies, as well as external factors like oil prices and global economic changes.
In recent years, TASI has experienced fluctuations between levels of 10,500 and 11,700 points, affected by changes in oil prices and local and international economic events. In 2024, the index reached approximately 11,000 points by the end of the year, following waves of ups and downs driven by the performance of leading stocks, particularly in the banking and energy sectors.
Investors and institutions use the TASI index to monitor the overall market performance and assess the attractiveness of the investment environment in the Kingdom. It is also relied upon to compare the performance of the Saudi market with regional and other emerging markets.
Financial Products Available in Saudi Exchange
The Saudi Exchange offers a diverse range of financial products that meet the needs of individual and institutional investors:
1. Stocks: Represent ownership in listed joint-stock companies, including major firms like Aramco and SABIC, as well as medium and small companies across various sectors.
2. Sukuk and Bonds: Debt instruments issued by the government or companies, allowing investors to invest in fixed income.
3. Investment Funds: Including exchange-traded funds (ETFs) and real estate investment trusts (REITs), providing diversification for investment portfolios.
4. Derivative Products: Such as futures contracts on stocks and indices, recently launched by Tadawul in collaboration with global risk management firms.
5. Nomu Market: A platform for small and medium-sized companies with flexible listing requirements.
The diversity of products contributes to deepening the financial market and provides investors with multiple options to manage their portfolios and achieve their financial goals within an organized and transparent environment.
Trading Mechanisms and Working Hours in Saudi Exchange
Trading operations in the Saudi Exchange follow advanced electronic systems that ensure transparency and speed of execution. Trading occurs from Sunday to Thursday, with the main session starting from 10:00 AM to 3:00 PM Riyadh time. There are also pre-opening and post-closing sessions for order settlement and price review.
The trading mechanism relies on a supply and demand system through licensed brokerage firms, allowing individual and institutional investors to place buy and sell orders via the brokers' electronic platforms. Regulations from the Capital Market Authority are applied to ensure investor protection, such as immediate disclosure of material news and trading controls during periods of significant volatility (Trading Halts).
The Saudi Exchange aims to provide a modern and secure trading experience by enhancing technical infrastructure, developing digital services, and supporting online trading platforms and mobile applications.
The Role of the Capital Market Authority in Regulating and Monitoring Saudi Exchange
The Saudi Exchange is under the direct supervision of the Saudi Capital Market Authority, which is responsible for regulating the market, monitoring trading operations, protecting investors, and ensuring compliance with laws and international standards. The authority performs several key tasks:
- Issuing regulations and instructions related to trading and disclosure.
- Granting licenses to financial brokerage firms.
- Monitoring listing operations and public offerings.
- Imposing penalties and fines in cases of manipulation or violations.
- Protecting investor rights by enforcing transparency in disclosure and providing complaint and compensation channels.
The authority plays a fundamental role in developing the financial market, facilitating the entry of foreign investments, and ensuring fairness among all parties, contributing to enhancing trust in the Saudi investment environment.
Developments in the Saudi Financial Market (2024–2025)
The Saudi Exchange has witnessed significant transformations during 2024 and 2025 that have reflected on the market's attractiveness and increased its depth:
1. Lifting Foreign Ownership Restrictions: Discussions have been held to raise the maximum foreign ownership in listed companies from 49% to 100%, leading to increased liquidity and a rise in the general index during certain periods.
2. International Recognition: The Saudi market has been recognized by global exchanges such as Hong Kong (HKEX), facilitating dual listings and attracting foreign investments.
3. New Listings and Public Offerings: The market has seen several IPOs in the energy, technology, and industrial sectors, enhancing market size and trading activity.
4. Development of Derivative Products: The market has expanded into futures contracts on stocks and indices to manage risks and provide advanced hedging tools for investors.
5. Enhancing Transparency: The market has launched initiatives to improve disclosure and governance, adopting the latest information protection systems.
These developments make the Saudi Exchange more competitive regionally and internationally, supporting the Kingdom's position as a developed financial hub in the Middle East.
Market Size and Liquidity: A Review of 2024 Data
By the end of 2024, the total market capitalization of companies listed on the Saudi Exchange exceeded 10 trillion Saudi Riyals (approximately 2.6 trillion USD). The main market includes around 200 companies, while the Nomu market attracts between 20 to 25 small and medium-sized companies.
The market is characterized by high liquidity compared to regional markets, with an average monthly trading volume between 5 and 6 billion Saudi Riyals, recording daily volumes reaching 10 billion Riyals during periods of high activity. This large liquidity is attributed to the presence of giant companies such as Aramco, major banks, and energy companies, along with the influx of foreign liquidity following the easing of regulatory restrictions.
High liquidity enhances market efficiency and provides multiple opportunities for investors to manage their portfolios, reflecting the confidence of both local and international investors in the robustness of the Saudi economy.
Nomu Market: Supporting Small and Medium Enterprises
The Nomu market is the parallel market in the Saudi Exchange, established specifically to support small and medium enterprises seeking funding through the financial market without needing to meet the strict listing requirements of the main market. Nomu offers greater flexibility in listing conditions, encouraging entrepreneurs and startups to enter the market and benefit from public capital.
Advantages of the Nomu Market include:
- Lower listing requirements in terms of capital and operational experience.
- Facilitating initial public offerings (IPOs) for startups.
- Providing investors with the opportunity to invest in high-growth companies, with a higher risk level.
The Nomu market contributes to diversifying the Saudi economy and achieving the goals of Vision 2030 by enhancing the role of the private sector and supporting innovation. It also offers investors opportunities to access promising companies in their early stages.
The Role of Foreign Investors in Saudi Exchange
The Kingdom places significant importance on attracting foreign investments to the Saudi Exchange. As of 2024, the foreign ownership percentage was capped at 49% in any company, with limited exceptions for certain companies. By mid-2025, discussions were held to gradually raise the ceiling and potentially eliminate it entirely, aiming to enhance liquidity and attract global capital.
Foreign investors contribute to deepening the market, increasing demand for stocks, and enhancing the Saudi market's position on global indices such as FTSE and MSCI for emerging markets. The entry of foreign investors also raises governance and transparency standards and allows the flow of international knowledge and expertise into the local market.
These steps support the Kingdom's goals of diversifying the economy and transforming Riyadh into a regional and global financial center.
The Financial Sector in Saudi Exchange: Banks and Insurance at the Forefront
The financial sector represents a core component of the Saudi Exchange, with bank and insurance stocks accounting for over 30% of the weight of the general market index (TASI). Profit growth, rising interest rates, and financial integration regulations have bolstered the performance of this sector during 2024–2025.
Listed banks recorded profit growth ranging between 6% and 8% in the first half of 2024, driven by rising interest rates and the expansion of financing services. The insurance sector has seen an expansion in products and services, with increasing demand for health insurance and property insurance.
The financial sector serves as the backbone of economic stability, reflecting the robustness of the Saudi financial system and its ability to withstand local and global economic challenges.
Comparing Saudi Exchange with Regional and Global Exchanges
The Saudi Exchange is the largest financial market in the Middle East in terms of market capitalization and number of listed companies. It competes regionally with exchanges in Dubai (DFM), Abu Dhabi, Qatar, and Kuwait, as well as emerging global markets like India and Turkey.
The Saudi market is characterized by high liquidity, the presence of giant companies, and a diverse range of financial products compared to regional exchanges. Additionally, its inclusion in international indices such as FTSE and MSCI has enhanced its attractiveness to global investors.
The Kingdom aims to transform the Saudi Exchange into a developed financial center by developing financial products (such as derivatives and real estate funds), improving infrastructure, and increasing transparency, making it a strong competitor to leading global emerging markets.
Investor Protection and Governance in Saudi Exchange
The Saudi Exchange is committed to applying the highest standards of investor protection and governance through:
- Regular disclosure of company results and material news.
- Imposing capital requirements on brokers.
- Providing a compensation fund for investors harmed by fraud or errors.
- Enforcing strict penalties against manipulation or trading based on insider information.
- Regulating temporary trading halts to protect the market from sharp fluctuations.
The authority also imposes systems to protect investor data and supports secure financial transactions. These policies ensure a fair and transparent investment environment, bolstering the confidence of both local and international investors in the market.
Future Opportunities and Challenges Facing Saudi Exchange
The Saudi Exchange faces numerous opportunities, most notably:
- Attracting more local and international listings.
- Developing innovative financial products (derivatives, new investment funds).
- Enhancing the market's position in global indices and attracting foreign capital.
- Supporting the growth of non-oil sectors (technology, healthcare, renewable energy).
Challenges include:
- Fluctuations in oil prices and their impacts on liquidity and indices.
- Regional and global competition with other emerging markets.
- The ongoing need to develop digital infrastructure.
Regulatory bodies are working to address these challenges through continuous reforms, increasing legislative flexibility, and promoting innovation in the financial sector.
Conclusion
The Saudi Exchange represents the heartbeat of institutional and individual investment in the Kingdom of Saudi Arabia, playing a pivotal role in achieving the goals of Vision 2030 by deepening financial markets and attracting local and foreign investments. Through regulatory developments, product diversification, and increased transparency, the Saudi financial market has strengthened its position regionally and internationally.
It is important to note that investing in financial markets involves risks that must be well understood. Continuous monitoring of the latest official data and studying company reports and financial indicators is always recommended before making any investment decision. Remember that the information provided here is educational and neutral, and does not constitute direct investment advice.
For the best investment experience, it is always advisable to consult a licensed financial advisor before entering any market or making significant investment decisions. The SIGMIX platform offers updated educational and analytical content to help you understand the Saudi financial markets more deeply, so do not hesitate to follow us and seek specialized consultations when needed.
Frequently Asked Questions
The TASI (Tadawul All Share Index) is the main index in the Saudi Exchange and reflects the performance of all companies listed in the main market. It is an important reference because it provides a comprehensive picture of the health of the Saudi financial market, and is used by investors and institutions to assess overall performance and make decisions based on the index's movement and changes over time. A rising index often indicates general optimism in the market and vice versa.
To open an investment account in the Saudi Exchange, you must contact one of the brokerage firms licensed by the Saudi Capital Market Authority. After selecting the appropriate broker, you need to submit the required documents (such as national ID or passport for foreign investors) and fill out a Know Your Customer (KYC) form. Once the account is activated, you can transfer funds and start trading easily and flexibly through the broker's electronic platform.
The Saudi Exchange offers a wide range of financial products, including: listed stocks of Saudi companies, government and private sukuk and bonds, exchange-traded funds (ETFs) and real estate investment trusts (REITs), as well as futures contracts on stocks and indices. The Nomu market also provides a platform for small and medium-sized companies, offering diverse investment opportunities for investors.
The Nomu market is the parallel market in the Saudi Exchange, aimed at supporting small and medium enterprises by facilitating listing procedures. Nomu allows startups to raise the necessary capital for expansion, with lower listing requirements compared to the main market. For investors, Nomu provides opportunities to access high-growth companies, with higher risk, contributing to energizing the entrepreneurial environment and achieving economic diversity.
Lifting foreign ownership restrictions allows greater access for foreign investors into listed companies, increasing liquidity in the market, enhancing demand for stocks, and supporting market valuations. It also contributes to enhancing the global standing of the Saudi Exchange by attracting foreign capital and raising governance and transparency standards. This is expected to increase market activity and depth in the long term.
Yes, most licensed brokerage firms offer advanced electronic trading platforms that allow individuals to execute buy and sell transactions easily through the internet or smartphone applications. These platforms provide real-time data, financial reports, and analytical tools to help investors monitor markets and manage their portfolios efficiently and securely.
The Saudi Exchange and the Capital Market Authority implement multiple protection systems: regular disclosure of company news and results, regulating temporary trading halts to manage price fluctuations, imposing capital requirements on brokers, providing a compensation fund for harmed investors, and enforcing strict penalties against manipulation or trading based on insider information. These mechanisms aim to ensure a fair and safe investment environment.
You can follow the financial data and quarterly or annual reports of each listed company through the official website of the Saudi Exchange, where financial statements, profit announcements, and key performance ratios such as price-to-earnings (P/E) ratio and earnings per share are available. Local financial platforms like "Argaam" also provide detailed reports and analyses to assist investors in evaluating companies.
The main market includes large and medium companies that meet strict listing requirements in terms of capital, disclosure, and governance. In contrast, the Nomu market is a platform dedicated to small and medium enterprises with lower listing requirements, aimed at supporting the growth of these companies by enabling them to raise necessary funding. The Nomu market carries higher risks and greater growth opportunities for investors.
According to 2024 data, the average monthly trading volume in the Saudi Exchange ranged between 5 and 6 billion Saudi Riyals, with recorded daily volumes exceeding 10 billion Riyals during periods of strong activity. This high liquidity reflects the market's attractiveness and investor confidence, providing multiple opportunities for efficiently managing investment portfolios.