Trading All Stocks in the Saudi Financial Market: Your Guide to Understanding

The term trading all stocks refers to the process of buying and selling shares owned in companies listed on the Saudi financial market (Tadawul). This is done through an advanced electronic platform that allows individual and institutional investors to execute trading orders at specific times during official working days. Since the establishment of the Capital Market Authority (CMA) in 2003, the Saudi market has witnessed a qualitative leap in transparency and regulation, making it one of the most developed and reliable markets in the region.

The listed stocks are distributed between the main market, which includes major companies with solid financial bases, and the Nomu market, dedicated to small and medium-sized enterprises with less stringent listing conditions. Trading all stocks gives investors the opportunity to diversify their investment portfolios across various sectors such as banking, energy, cement, retail, and telecommunications, among others. Trading all stocks is subject to a set of regulations aimed at protecting investors and ensuring fairness and transparency in the disclosure of financial and operational information.

Trading operations follow specific steps that begin with opening an investment account with a licensed broker, depositing funds, and then issuing buy or sell orders. Orders are executed according to an automated system that ensures fairness among all parties, and transactions are monitored by the Capital Market Authority to regulate any manipulation or violations. The Tadawul All Share Index (TASI) is the most important compass for measuring price movements of all listed stocks, reflecting the overall average performance of the market.

The Saudi financial market consists of several main components: the main market (Tadawul), the Nomu market (parallel), and the depository and settlement centers. The main market hosts most of the major companies, while the Nomu market represents a platform for small and medium-sized companies aspiring to expand and attract investments. All trading operations are executed through an integrated electronic platform managed by Tadawul, where all listed companies are subject to high disclosure and transparency requirements.

Trading sessions are held from Sunday to Thursday, and operations go through stages starting with a pre-opening session (for order matching), followed by the main trading session, and then the closing session. Investors can issue limit orders or market orders, and transactions are executed based on price and time priorities. Brokers are required to comply with the regulations of the Capital Market Authority, and prices and indicators are published in real-time to enable investors to make decisions based on accurate data.

The market structure includes advanced regulatory mechanisms to ensure market efficiency and fairness, such as monitoring unusual trading activities and suspending trading on stocks that experience unjustified price movements until the reasons are disclosed. The authority also provides official channels for receiving investor complaints and addressing potential violations.

The Saudi Capital Market Authority plays a pivotal regulatory and supervisory role to ensure market integrity and protect the rights of investors, whether individuals or institutions. The authority works to establish regulatory frameworks and monitor the compliance of listed companies and financial intermediaries with disclosure and transparency standards. It also imposes strict penalties for any manipulation or trading based on insider information, requiring companies to disclose any material events that may affect stock prices or investor decisions promptly.

Among the most prominent protective tools provided by the authority are the mechanisms for suspending or halting trading on stocks that experience sharp fluctuations or significant changes in ownership structure, as occurred with Hail Cement (Symbol: 3001) following the announcement of the acquisition deal. The authority also allows investors to access all financial statements and periodic reports of companies through the Tadawul platform, in addition to organizing awareness campaigns and financial education to raise the level of investment culture.

Through these measures, the authority aims to enhance trust in the Saudi financial market and attract more local and foreign investments within a regulatory framework that ensures fairness and protects all parties.

The Tadawul All Share Index (TASI) is the main index for measuring the performance of all stocks in the Saudi market, encompassing all companies listed in the main market. The index reflects the average changes in stock prices and is a key tool for tracking overall market trends and assessing the impact of economic and financial developments on the market.

In addition to TASI, there are sectoral indices covering the main economic sectors such as banking, energy, cement, telecommunications, and retail. These indices allow investors to analyze sector performance separately and compare the performance of companies within each sector. For example, the cement sector index reflects changes in the stock prices of cement companies, serving as an important reference for comparing the performance of Hail Cement (3001) with its competitors.

Sectoral indices assist investors in building diversified investment portfolios and evaluating the risks associated with each sector, especially amid economic changes or regulatory developments. These indices also enable researchers and analysts to monitor the impact of significant news and major deals, such as the acquisition of Hail Cement by Qassim Cement, on the overall sector performance.

The cement sector is one of the cornerstones of the Saudi economy due to its vital role in construction projects, especially with the launch of Vision 2030 initiatives that require massive infrastructure. The sector includes more than 15 listed companies, ranging from major firms like Saudi Cement and Qassim Cement to smaller companies like Hail Cement (3001). These companies compete to meet the growing domestic demand for cement and geographically distribute production to cover various regions of the Kingdom.

In recent years, the cement sector has faced challenges related to market saturation and increased production capacity compared to demand levels, leading to a decline in profit margins for some companies, especially smaller ones. However, the sector witnessed a relative recovery in profits in 2024, as mid-year data showed that listed cement companies achieved aggregate profits of approximately SAR 2.0 billion during the first nine months of 2024, with a noticeable improvement in the third quarter.

The profits of cement companies are influenced by several key factors, including the level of government spending on housing and infrastructure projects, the cost of production inputs such as fuel, and intense competition among producers. Typically, larger companies monopolize a larger market share due to their broader distribution networks, while smaller companies focus on specific geographical areas to improve their operational margins.

Hail Cement Company was established in 1976 in Hail, with the aim of producing and marketing cement and limestone to meet the construction needs in northern Saudi Arabia. Over the past decades, the company has undergone strategic transformations in response to market fluctuations, focusing on improving operational efficiency and controlling costs to face intense competition in the sector.

By mid-2024, Hail Cement was considered relatively small in the Saudi cement sector, with approximately 97.9 million shares and a market value of around SAR 1.14 billion by the end of 2024. The company faced profitability pressures due to market saturation and declining demand during certain periods, prompting it to reduce production and adopt conservative dividend policies.

Recent developments included the announcement by Qassim Cement Company of its full acquisition of all shares of Hail Cement in June 2024, leading to the suspension of trading of the company's stock (3001) and the initiation of delisting procedures. This move aims to enhance Qassim Cement's production capacity and unify marketing and distribution operations in northern Saudi Arabia while safeguarding shareholder rights through a share exchange mechanism or cash compensation.

The consolidated financial data for 2023 and 2024 show fluctuations in Hail Cement's performance, with the company recording volatile profits due to changes in local demand and competition. In 2023, the company's net profit was approximately SAR 24.6 million, while profit in the first quarter of 2024 declined to SAR 15 million, a decrease of 19% compared to the same period last year.

The stock price before trading suspension was around SAR 11.6, bringing the market value to SAR 1.14 billion. The price-to-earnings (P/E) ratio was relatively high at about 46 times, reflecting lower profits and investor expectations for future performance improvement. The company announced a cash dividend of 3.5% of the nominal value of the share in the fourth quarter of 2023, which is SAR 0.35 per share.

The performance of Hail Cement illustrates the extent to which smaller companies in the sector are affected by market fluctuations and the necessity of adopting strategies to scale production and rationalize costs to ensure financial sustainability.

The acquisition of Hail Cement by Qassim Cement in June 2024 represents one of the most significant mergers in the Saudi cement sector in recent years. Shareholders of both companies approved increasing Qassim Cement's capital to SAR 1.10 billion to purchase all shares of Hail Cement, totaling approximately 97.9 million shares.

The Saudi financial market (Tadawul) announced the suspension of trading of Hail Cement's stock on June 11, 2024, in preparation for its delisting and the transfer of the company's assets to Qassim Cement. This step aims to reduce competition and increase operational efficiency by unifying production and distribution operations in northern Saudi Arabia.

From a regulatory perspective, the Capital Market Authority ensures shareholder rights through a clear mechanism for share exchange or cash compensation, according to the regulations governing such transactions. The merger is expected to positively impact Qassim Cement's market share and financial strength, continuing to influence the sector's structure and competition rates.

The Saudi cement sector includes several large and medium-sized companies competing for market share across various geographical regions. Hail Cement's main competitors before the acquisition included companies such as Saudi Cement, Qassim Cement, Southern Cement, Eastern Cement, and National Cement Company.

Comparisons show that larger companies typically monopolize a larger market share due to their financial capabilities and extensive distribution networks. For example, Qassim Cement focuses on northern regions of the Kingdom, while Saudi Cement meets needs in the west. In contrast, Hail Cement's presence was often limited to areas near its plant, with a limited market share.

Competitiveness depends on several factors, including product quality, distribution efficiency, production costs, and production capacity. Most listed companies' profits fluctuated during 2023-2024, but larger companies maintained relative stability in dividends due to their financial solvency.

The performance of the Saudi cement sector is influenced by several economic and financial variables, most notably:

1. Government spending on infrastructure and housing projects: Increased spending leads to higher demand for cement, while a slowdown in projects results in declining sales.
2. Fuel and electricity prices: These constitute a significant portion of production costs, and any changes in prices directly impact profit margins.
3. Competition among companies: An increase in the number of producers leads to market saturation and price declines, putting pressure on profit margins.
4. Seasonal factors: Such as slowdowns in winter or during the Hajj and Umrah seasons, where the pace of project implementation changes.
5. Regulatory developments: Such as acquisitions or mergers, which restructure the sector and impact each company's market share.

Data from 2024 indicates that the sector has seen a slight improvement in demand with the commencement of major projects under Vision 2030, although excess production capacity remains a challenge for small and medium-sized companies.

Transparency and disclosure are fundamental pillars to ensure the efficiency and fairness of trading all stocks in the Saudi financial market. The Capital Market Authority requires all listed companies to publish periodic financial reports and disclose promptly any material events that may affect stock prices or investor decisions.

Disclosures include quarterly and annual financial data, announcements of cash distributions, changes in ownership structure, and acquisition or merger transactions. The Tadawul platform allows investors to access all this information in real-time, enabling them to follow market developments and make investment decisions based on accurate data.

In cases of material events, such as the acquisition of Hail Cement by Qassim Cement (3001), trading of the stock is suspended until the disclosure is completed, ensuring that investors have sufficient time to understand the impact of the event on the stock's value and their rights.

Trading all stocks in the Saudi market goes through several essential stages:

1. Opening an investment account with a licensed financial broker from the Capital Market Authority.
2. Depositing the funds allocated for investment.
3. Using the electronic trading platform to issue buy or sell orders.
4. Monitoring the execution of orders during official market sessions (from Sunday to Thursday).
5. Reviewing portfolio reports and financial movements through the broker.

Modern electronic platforms provide technical and fundamental analysis tools, in addition to real-time monitoring of sectoral and general indices. It is important for investors to review regulatory guidelines and ensure they understand market mechanisms before issuing any trading orders.

It should be noted that all trading operations are subject to monitoring by the Capital Market Authority, and disclosure and transparency controls apply, with mechanisms in place to protect investors in cases of disputes or system errors.

The Saudi financial market witnessed several significant developments during 2024 and 2025, including a recovery in profits for listed cement companies and improvements in sectoral indices in some quarters, alongside fluctuations in profits for some smaller companies. Cement companies recorded aggregate profits of approximately SAR 2.0 billion in the first nine months of 2024, with third-quarter profits rising to SAR 648.3 million, reflecting improved demand for cement due to infrastructure projects.

On the other hand, the market continued to attract foreign investors under specific rules, with an increase in daily trading volumes and levels of financial disclosure. Data showed an expansion in the number of listed companies and a growth in traded liquidity, enhancing the Saudi market's position among emerging markets.

However, challenges remain for some sectors, such as pressures from excess production in cement, changes in input prices, and fluctuations in other sectors. Therefore, investors are advised to regularly monitor regulatory and financial developments and consult a licensed financial advisor before making any investment decisions.