Saudi Stock Trading: Everything You Need to Know About the Market,

The Saudi financial market (Tadawul) is the official market for trading securities in the Kingdom of Saudi Arabia, supervised by the Capital Market Authority (CMA). Established in 2007 as a joint-stock company specializing in the financial sector, it was recently renamed the Saudi Stock Exchange. The market includes several main sections, notably the main market (Tadawul), the parallel market (Nomu), the sukuk and bonds market, and the futures commodities market. The market adheres to strict governance and transparency standards, attracting both local and foreign individual and institutional investors. The CMA establishes laws that ensure fair transactions and protect investors, monitoring IPOs and subscriptions. Thanks to this regulation, the Saudi market has become the largest in the Gulf in terms of market capitalization and the number of listed companies, playing a pivotal role in financing local companies and supporting economic development.

The main Saudi market index, known as the TASI (Tadawul All Share Index), is the benchmark index that measures the performance of all companies listed on the main market. The index is calculated based on the adjusted market capitalization of company shares and reflects changes in overall stock prices. TASI represents an important tool for investors to track market trends and assess overall performance without focusing on a specific company. In 2025, the index closed at approximately 10,491 points, recording a decline of 12.8% compared to the beginning of the year, due to fluctuations in oil prices and changes in investment liquidity. TASI is also used by analysts to evaluate the market's sensitivity to local and global economic variables and serves as a primary reference for monitoring sectoral and individual company performance.

During the years 2024 and 2025, the Saudi stock market witnessed notable transformations. The TASI index declined by 12.8% to reach 10,491 points by the end of 2025, marking the largest annual decline in years, linked to the drop in global oil prices from $81 per barrel at the beginning of 2024 to $60 by the end of 2025. Despite this decline, foreign investment flows continued, with net foreign direct investments in stocks exceeding $4 billion in 2025. On the IPO front, the number of subscriptions in the main market reached 14 in 2024 with a value of 14.2 billion SAR, and 13 in 2025 with a value of 14.5 billion SAR, with the listing of Flynas emerging as the largest deal in 2025. The parallel market (Nomu) saw 24 listings worth 1.27 billion SAR, with the Nomu index declining by 26%. These figures confirm that the Saudi market is undergoing a transitional phase that combines new opportunities with challenges from global price fluctuations.

The Saudi stock market is characterized by a diverse range of sectors that meet various national economic needs. Key sectors include the energy and petrochemicals sector (dominated by Aramco and SABIC), the financial sector (banks such as Al-Rajhi and National Commercial Bank), the heavy industries and basic goods sector (such as Almarai and chemicals), the telecommunications and information technology sector (STC and Mobily), the real estate and construction sector (Dar Al Arkan and City Cement), and sectors like healthcare, education, and media. Competition within these sectors is marked by the struggle between major local players and the entry of new or foreign companies, supported by Vision 2030 initiatives to diversify the economy and open new fields such as tourism and renewable energy. Each sector is affected by various factors such as oil prices, government projects, technological developments, and market regulations.

The Saudi market witnessed significant activity in initial public offerings during 2024 and 2025. In 2024, 14 IPOs were executed with an approximate value of 14.2 billion SAR, and in 2025, the number of offerings reached 13 with a higher total value (14.5 billion SAR), indicating an increase in average deal sizes. Among the notable offerings, the Flynas IPO was the highest at a value of 4.1 billion SAR in 2025. Despite this activity, a decline was observed in individual investor participation in subscriptions, with individual coverage rates dropping from 70.9% to 36% by the end of 2025. The market also witnessed some cancellations or suspensions of offerings due to market conditions. The parallel market (Nomu) also saw 24 qualified offerings in 2025 worth 1.27 billion SAR. These trends reflect the dynamics of supply and demand and changing risk appetites among investors.

The Saudi stock market is closely linked to global oil prices, given the national economy's heavy reliance on oil revenues. Fluctuations in oil prices directly affect the profits of major companies in the energy and petrochemicals sector, such as Aramco and SABIC, which in turn impacts the performance of the TASI index and overall investor confidence. In 2024-2025, the decline in Brent crude prices from $81 to $60 led to a decrease in the overall index and volatility in the performance of listed companies. Additionally, supporting sectors such as construction and heavy industries are affected by changes in oil prices, as the volume of government projects and capital expenditures is linked to oil revenue levels. Therefore, monitoring oil prices is a key indicator for analyzing movements in the Saudi market.

Trading in the Saudi financial market is conducted electronically through licensed brokerage firms or approved banks. An investor wishing to trade must open an investment account with a licensed broker and provide the required documents (identity or residency), then deposit an amount to get started. Orders can be executed electronically through trading platforms by selecting the stock symbol, specifying the quantity and price (market order or limit order), and tracking the execution of the transaction during official trading sessions from Sunday to Thursday (10:00 AM - 3:00 PM). Trading orders vary between market orders (executed at the best available price) and limit orders (executed when a specified price is reached). Brokerage firms adhere to standards for protecting client funds and provide services that allow investors to track their portfolios and conduct buying and selling operations with high flexibility.

The parallel market (Nomu) is a trading platform dedicated to small and medium-sized companies that prefer more flexible listing conditions compared to the main market. Nomu allows startups to raise funding and expand their operations, with lower requirements in terms of capital and the number of shares available for trading. It represents an opportunity for qualified investors willing to take on higher risks in exchange for greater growth potential. In 2025, Nomu witnessed 24 offerings worth 1.27 billion SAR, but also recorded a 26% decline in the index, reflecting the sensitivity of this market to economic fluctuations. Nomu serves as a testing ground for companies before transitioning to the main market and enhances investment diversification in the Saudi economy.

The Saudi stock market operates according to a specific schedule from Sunday to Thursday, with the main trading session starting from 10:00 AM to 3:00 PM Riyadh time. A pre-trading period (Pre-Open) usually begins at 9:30 AM, allowing companies to display prices and prepare orders. All operations are supervised by the Capital Market Authority, which ensures that brokers and investors comply with laws and regulations, such as ownership disclosure, preventing manipulation, and regulating insider trading. The authority also imposes nominal fees on trading operations and grants licenses to brokers and asset management companies. Compliance with these regulations is essential to ensure market integrity and protect the rights of all parties.

In recent years, the Saudi market has seen significant openness to foreign investments, with the implementation of the Qualified Foreign Investor (QFI) system and the easing of ownership restrictions. Foreigners can now invest directly in Saudi stocks after meeting specific conditions, such as opening an account with a licensed broker and providing the required documentation. In 2025, net foreign investments in stocks exceeded $4 billion, reflecting growing global interest in the Saudi market, especially after its inclusion in global emerging market indices. Foreign investors contribute to enhancing liquidity, transferring knowledge, and stimulating competition while adhering to local laws, such as anti-money laundering and corporate governance.

Saudi Arabia is characterized by the absence of personal income tax or capital gains tax on individuals when trading stocks or receiving dividends. Companies are only taxed on their profits at a rate of 20% according to the tax system. There are minimal transaction fees such as brokerage fees and authority fees, and a value-added tax (15%) applies to goods and services, which may include some financial brokerage services. This encouraging tax environment enhances the market's attractiveness to both local and foreign investors. However, the Capital Market Authority advises investors to carefully review all fees and costs before making any investment decisions.

Listed companies in the Saudi market distribute dividends to shareholders periodically (usually semi-annually or annually) after approval by the general assembly. An investor is entitled to dividends if they own the stock on the declared eligibility date set by the company. Cash dividends are transferred directly to the bank account registered with the brokerage firm. The amount of dividends varies based on the company's performance and the board's policy. Some companies, such as Aramco and SABIC, are known for their stability in dividend distribution, attracting investors seeking steady returns. It is important to review the company's announcements regarding distributions and relevant dates to ensure entitlement to dividends.

Recently, the Saudi market has witnessed several important economic and regulatory developments, including the completion of the National Debt Management Center's international loan of $13 billion to support infrastructure projects, the approval of a new tax on sugary drinks starting in 2026, and the imposition of a tax on vacant land in Riyadh. Additionally, the announcement of the government data center project "Hexagon" in Riyadh enhances the Kingdom's position in the technology sector. At the company level, the market recorded notable acquisition and merger deals, such as Catron's acquisition of 55% of Gulf Catering, and Riyadh Cement's contract to transition to natural gas. These developments reflect the market's dynamics and future directions in light of Vision 2030.

Despite the significant opportunities offered by the Saudi stock market, there are challenges that investors should be aware of. Key risks include fluctuations in oil prices that directly affect market indices, changes in global economic policies, regulatory changes, liquidity risks in some less-traded stocks, and the potential decline in individual investors' risk appetite. Additionally, strong competition among companies and the volatility of some sectors influence traders' decisions. It is important for investors to study the market thoroughly, stay updated with news and periodic reports, and ensure diversification of their investment portfolios in line with their goals and risk tolerance.