Saudi Stock Market: A Comprehensive Guide to Trading

The Saudi stock market is the official stock exchange of the Kingdom of Saudi Arabia, commonly known as "Tadawul." It was established in 2007 as an independent institution to oversee the trading of securities and operates under the umbrella of the Saudi Capital Market Authority (CMA). The market gains strategic importance in the Saudi economy as it represents a primary platform for raising capital through company listings and injecting liquidity for investment in diverse sectors. The main market includes major companies from various sectors such as energy, banking, telecommunications, and consumer goods, while the parallel market (NOMU) provides a stimulating environment for the growth of small and medium-sized enterprises. The Saudi stock market contributes to enhancing transparency and developing the local investment environment, and it is one of the main drivers of achieving the Kingdom's Vision 2030 by diversifying income sources and attracting foreign investments. The TASI index represents the main general index that reflects the performance of all companies listed in the main market, making it an important tool for measuring market health and trends.

The Saudi stock market consists of two main markets: the main market (Tadawul Main) and the parallel market (NOMU). The main market includes large companies with high capitalization that meet strict listing requirements including transparency, disclosure, and capital size. On the other hand, the parallel market (NOMU) was launched to provide a platform for small and medium-sized enterprises that wish to list under less stringent requirements, enhancing economic diversification and providing new investment opportunities. The parallel market allows only licensed investors to trade shares of the companies listed therein. By the end of 2024, the number of companies listed in the main market was approximately 200, while the number of companies in the parallel market exceeded 30, with expectations of continued growth in numbers thanks to listing facilitation and support from regulatory bodies.

The Saudi stock market relies on several key indicators to measure performance. The TASI index is the general index that includes all companies listed in the main market and is calculated based on the market capitalization-weighted of the shares. Alongside TASI, there are sectoral indices that reflect the performance of sectors such as banking, energy, petrochemicals, telecommunications, retail, and others. These indices help investors track the performance of different sectors and make data-driven decisions. The TASI index rose at the end of 2025 to approach 11,000 points, after being around 9,700 points at the beginning of 2024. Sectoral indices, such as the banking or energy index, play an important role in analyzing market performance in more detail and identifying leading or declining sectors.

The Saudi stock market is characterized by the diversity of sectors listed within it, providing investors with a wide range of options to diversify their portfolios. The financial and banking sector leads the market in terms of market capitalization and number of transactions, with leading Islamic and commercial banks such as Al Rajhi Bank and National Commercial Bank. The energy sector, led by Saudi Aramco, represents the lifeblood of the national economy and significantly impacts the general index. The petrochemical sector, led by SABIC and other companies, also contributes a significant portion of the traded liquidity. Telecommunications sectors (such as STC and Mobily) and retail and consumer goods sectors (such as Almarai and Savola) are experiencing continuous expansion due to population growth and digital transformations. New sectors such as renewable energy and infrastructure have also emerged with the listing of companies like ACWA Power and the Saudi Electricity Company. This sectoral diversity enhances market stability and provides greater flexibility in facing economic challenges.

Trading operations in the Saudi stock market are conducted through an advanced electronic system that allows for efficient and transparent order execution. Official trading hours extend from Sunday to Thursday, with three main sessions: the pre-opening session, the continuous session, and the closing session. The market relies on an auction system to determine opening and closing prices, while transactions are executed during the continuous session based on buy and sell orders. There is no leverage (margin) as seen in some international markets; instead, investors must deposit the full value of the transaction. Individuals and companies can trade through licensed broker platforms, where the process requires opening an investment account and verifying identity through the National Access Portal (Absher). The CMA ensures the protection of investors' rights by monitoring trades and preventing manipulation or information leaks.

The Saudi stock market recorded a total market capitalization of nearly 5 trillion Saudi Riyals at the end of 2024, a significant increase compared to previous years. This growth is attributed to rising stock prices, an increase in the number of listed companies, and mergers and acquisitions. The number of executed transactions exceeded 50 million in 2024, with trading volume growing by more than 20% annually. These figures reflect the depth and liquidity of the market, highlighting its position as an important regional and international player. Additionally, increased liquidity enhances the market's attractiveness to both foreign and local investors, especially with the lifting of regulatory restrictions on foreign ownership.

The Saudi stock market witnessed a series of significant developments during 2024 and 2025 that enhanced its regional and global standing. Among the most important of these developments was the completion of the merger between Saudi Aramco and SABIC in petrochemicals, resulting in a massive energy and industrial entity. The maximum foreign ownership limit was also raised to 100% in some companies, up from 49%, to enhance the flow of foreign investments. The market also saw initial public offerings (IPOs) of companies in the technology, pharmaceuticals, and renewable energy sectors, such as Sabic Technology and the Model Medical City. Tadawul launched advanced electronic services and new trading platforms that enhanced the investor experience and increased liquidity and interaction. Additionally, the authority issued new regulations to facilitate governance, enhance transparency, and protect investors, alongside launching a market stability fund to address sharp fluctuations.

Saudi Aramco (symbol: 2222) is the largest listed company in the Saudi stock market and the world in terms of market capitalization. The price of Aramco's share is about 37 Saudi Riyals in mid-2025, with a market value of approximately 6.5 trillion Riyals. Aramco is characterized by a low price-to-earnings ratio (around 10 times) and a high dividend yield ranging from 13-15%. The company recorded a net profit exceeding 130 billion Riyals in the fourth quarter of 2024, with a year-on-year revenue growth of 30%. Aramco's performance reflects the nature of the Saudi market, which is energy-dependent, and serves as a model for leading companies that directly influence the TASI index and liquidity movement in the market. Aramco's results stimulate the petrochemical, infrastructure, and financial markets in general.

Competition in the Saudi stock market is not limited to companies within the same sector; it also includes interactions among major sectors such as energy, banking, telecommunications, and consumer goods. In the energy sector, Aramco competes with SABIC and other petrochemical companies. In the banking sector, there is competition among Al Rajhi Bank, National Commercial Bank, Riyad Bank, and Alinma Bank for asset leadership and trading volume. The telecommunications sector sees competition between STC, Mobily, and Zain Saudi Arabia, while companies like Almarai and Savola stand out in the food sector. The entry of renewable energy and infrastructure companies like ACWA Power enhances market dynamics. This competition drives product development, financial performance improvement, and increased innovation, enhancing the market's attractiveness to investors both locally and internationally.

The Saudi Capital Market Authority (CMA) plays a pivotal role in regulating and developing the Saudi stock market. The authority is responsible for issuing legislation and regulations aimed at protecting investors, ensuring transparency, and enhancing market efficiency. The authority's tasks include monitoring trades, overseeing listing and subscription processes, and regulating financial disclosure for companies. In 2025, the authority issued amendments to facilitate the listing of small companies, enhance corporate governance, and launch investor protection programs such as the market stability fund. The authority also monitors the application of best international standards and works to develop the investment environment to attract foreign and local capital. All these efforts contribute to achieving the goals of Vision 2030 and developing a world-class financial market.

The Saudi stock market has undergone a significant transformation in policies related to foreign investment, as the maximum foreign ownership limit was raised to 100% in 2025 for some companies, reflecting the confidence of regulatory authorities in foreign investment and its role in enhancing liquidity. The authority allows foreign investors to open investment accounts through licensed brokers, following specific documentation procedures. There are no taxes on capital gains for individuals, while dividends are subject to a withholding tax of 5% for non-Saudi investors. This attractive investment climate, supported by transparency in disclosure and governance systems, has contributed to the influx of new foreign capital and enhanced the market's position among emerging global markets.

Despite the stability of the Saudi market and strong government support, it faces several challenges and risks. The most prominent of these risks is the strong correlation with global oil prices, as any significant fluctuations in prices directly reflect on the results of major companies such as Aramco and SABIC. There are also risks associated with global economic conditions, such as fluctuations in interest rates, geopolitical changes, and a slowdown in global economic growth. Additionally, regulatory changes or weak disclosure by some companies may affect investor confidence. To mitigate these risks, it is always advisable to diversify investment portfolios and follow governance and transparency measures while enhancing financial literacy among investors.

Investors and followers of the Saudi stock market often have many questions about indicators, trading mechanisms, taxes, liquidity, and subscription and disclosure procedures. In the next section of this article, we will review the most common questions along with detailed answers to help the reader understand the practical and regulatory aspects of the Saudi market, based on the latest regulations and standards approved by the Saudi Capital Market Authority and Tadawul.

The Saudi stock market has increasingly focused on digital transformation and technological innovation in recent years. Tadawul has launched advanced electronic platforms such as "Tadawuli" and future trading systems to facilitate real-time trading operations for individual and institutional investors. Smart applications have also been introduced to allow for real-time price tracking, order management, and data analysis. These developments have enhanced market liquidity and responsiveness, reducing operational costs for investors. Additionally, financial technologies (FinTech) have contributed to the development of services such as remote trading, portfolio management, and electronic disclosure, making the Saudi market one of the most technologically advanced in the region.