Stock Affairs in the Saudi Financial Market: A Comprehensive Guide

Stock affairs refer to all activities and procedures related to the issuance, trading, and monitoring of stocks in the financial market. In the Saudi financial market, stocks are ownership units representing a portion of the capital of joint-stock companies that are traded in an organized manner under the supervision of the Capital Market Authority. The importance of stock affairs stems from being a key tool for attracting capital and distributing risks, as they provide investors with the opportunity to participate in the growth of companies and benefit from dividend distributions. The Capital Market Authority oversees ensuring transparency and protecting investors by establishing regulations governing disclosure, corporate governance, and trading procedures. This includes monitoring quarterly and annual financial reports, following market news and significant announcements, and understanding indicators that reflect market performance such as the TASI index.

The Saudi financial market (Tadawul) consists of two main sections: the main market and the growth market. The main market includes large and stable companies that adhere to strict listing criteria regarding capital, governance, and financial disclosure. In contrast, the growth market is a parallel market designed for small and medium-sized enterprises with simpler listing requirements to facilitate their entry into the market and raise the necessary funding for growth. This division aims to enhance market flexibility and provide diverse investment opportunities for investors. The growth market represents an important platform for startups, while the main market remains the focal point of the Saudi financial market in terms of market capitalization and trading volume. Both markets are subject to the oversight of the Capital Market Authority and Tadawul to ensure transparency and integrity in all operations.

The journey of dealing with stock affairs in Saudi Arabia begins with opening a trading account with a brokerage firm licensed by the Capital Market Authority. This requires providing a national ID and bank account details, after which the investor receives a unique Investor Identification Number (RIB) that allows access to the electronic trading platform. All buying and selling operations are conducted through organized trading sessions from Sunday to Thursday, and are subject to electronic mechanisms that ensure efficient and swift execution of transactions. All operations pass through a clearing system to ensure fair receipt and delivery of stocks and funds. Regulations require brokerage firms to fully disclose trading fees and commissions, as well as provide periodic reports to investors on transaction details. The authority mandates all participants to comply with regulations, ensuring the protection of rights and minimizing risks.

Stock prices in the Saudi financial market are determined by the interaction of supply and demand during trading sessions. However, several factors influence this balance, including financial results of companies, profit forecasts, dividend announcements, and local and global economic changes such as oil price movements and inflation rates. New regulations from the Capital Market Authority require companies to disclose significant data that may affect stock prices, such as large contracts or management changes. Additionally, psychological factors and global movements play a role in increasing or decreasing liquidity and daily trading volume, which directly impacts price volatility. Monitoring these factors is an important part of understanding stock affairs and managing investment risks.

The main market index 'TASI' is the general index that reflects the performance of all stocks listed in the Saudi financial market. This index serves as a primary reference for investors to assess overall market trends and is also a performance measurement tool for investment portfolios. In addition to TASI, there are sector indices that reflect the performance of stocks in each sector such as energy, banking, telecommunications, and industry. Sector indices assist investors in analyzing the most growing or volatile sectors, providing them with a better view of market trends. The indices are updated in real-time during trading sessions, providing timely data for informed investment decisions. Investors are keen to monitor these indices to determine their strategies and compare the performance of their selected companies with the overall market performance.

All companies listed in the Saudi financial market are required to publish quarterly and annual financial reports within specific timeframes according to the regulations of the Capital Market Authority. These reports reflect the company's performance, revenue size, net profits, liquidity, and financial obligations, and are an important reference for investors to assess the company's strength and financial sustainability. These reports allow for the analysis of profitability ratios, price-to-earnings (P/E) ratios, and dividend yield ratios. They also highlight potential risks and management forecasts for upcoming periods. Regular disclosure enhances transparency and investor confidence, providing a solid foundation for making decisions based on accurate and reliable data. It is important to review these reports through official sources such as the Tadawul website or the company's website.

The Capital Market Authority plays a pivotal role in regulating and supervising all stock affairs activities in Saudi Arabia. By issuing regulations and laws, the authority ensures investor protection, market integrity, and adherence to the highest standards of transparency and disclosure. The authority's tasks include regulating listing processes, enforcing regular disclosure of financial results, and monitoring trading activities to prevent manipulation or insider trading. Additionally, the authority establishes frameworks for corporate governance that ensure management transparency and board independence, encouraging the adoption of best international practices. Compliance by companies and investors with the authority's regulations reduces risks and helps build a developed and sustainable financial market.

The energy sector, specifically oil and gas, forms the backbone of the Saudi economy. Saudi Aramco (symbol 2222) is the largest joint-stock company in the Saudi financial market in terms of market capitalization and significantly influences the overall market index. In 2024-2025, Aramco recorded strong financial performance with revenue growth of 20-30% and an increase in net profits due to rising oil prices. The sector also includes companies like SABIC in petrochemicals and Saudi Electricity in the electricity sector. The future of the sector is influenced by factors such as global oil prices, expansion in renewable energy, and Vision 2030 projects aimed at diversifying national income sources. Sector analysis is essential for understanding market dynamics and identifying companies with sustainable performance.

The Saudi financial market is characterized by diverse competitors across various sectors. In the energy sector, Aramco stands out as an unmatched dominant force, while SABIC is the main competitor in petrochemicals. The banking sector witnesses competition among Al Ahli Bank, Bank Alinma, and Saudi French Bank. The telecommunications sector includes companies like STC, Mobily, and Zain Saudi Arabia. Competition drives companies to improve efficiency and offer innovative products and services. Additionally, the competitive environment driven by regulations and corporate governance contributes to enhancing the quality of financial disclosure and increasing investor confidence. Understanding sector competition helps investors identify opportunities and challenges within each sector.

The Saudi financial market has witnessed a series of important legislative and regulatory updates during 2024-2025. These amendments included requiring companies to provide early disclosures of significant data, facilitating mergers and acquisitions, and gradually increasing the ownership percentage of foreign investors. The Capital Market Authority launched initiatives to enhance transparency, such as updates to disclosure and corporate governance regulations, and developing electronic mechanisms to expedite transaction completion. The market also saw the listing of new companies in the main market and growth market, and initial public offerings (IPOs) for government and private companies. These updates aim to make the market more attractive to local and international investors and enhance its efficiency and sustainability in the long term.

Following market news and analytical reports is an essential part of understanding stock affairs. These sources provide up-to-date information on company results, global market movements, changes in oil prices, and regulatory developments. Websites like Tadawul and Argaam publish real-time updates on prices, company announcements, and sector analyses that help investors stay informed about all new developments. Analytical reports contribute to understanding market trends and assessing risks and opportunities. It is always advisable to rely on official or recognized sources to avoid rumors and inaccurate information. Regular monitoring of news helps investors make decisions based on sound foundations and supports effective risk management.

Initial public offerings (IPOs) represent one of the most prominent events in stock affairs, allowing companies to raise new capital by offering part of their shares to the public. The Saudi financial market witnessed numerous IPOs from companies across various sectors during 2024-2025, enhancing market depth and increasing investment options. IPOs are subject to strict oversight by the Capital Market Authority to ensure transparency and full disclosure of significant information. They also contribute to enhancing liquidity and diversifying the shareholder base. IPOs are seen as indicators of market vitality and future trends, often attracting interest from local and international investors.

Investors use several indicators to evaluate stocks, the most prominent being market capitalization, price-to-earnings (P/E) ratio, and dividend yield. Market capitalization is calculated by multiplying the number of outstanding shares by the current share price, reflecting the company's size in the market. The P/E ratio measures the relationship between the stock price and the company's earnings, with a lower ratio indicating relative attractiveness of the stock (considering sector conditions). Dividend yield expresses the ratio of distributed profits to the stock price, which is important for investors seeking regular income. Analyzing these indicators helps in understanding the financial strength of the company and comparing it with competitors and the sector as a whole.

To effectively follow stock affairs, one should rely on official and trustworthy sources such as the official website of the Saudi financial market (Tadawul), the Capital Market Authority (CMA), and Argaam financial news and data platform. These platforms provide access to real-time price data, company announcements, financial reports, and market news. Listed companies also publish their quarterly and annual reports on their websites under the investor relations section. These sources provide comprehensive and reliable coverage of market developments and assist investors in making decisions based on accurate and transparent information. It is always advisable to verify the accuracy of data from these sources and not rely on rumors or unconfirmed news.