TASI Index: Everything You Need to Know About Saudi Stock Market

The TASI Index is an abbreviation for Tadawul All Share Index, representing the main index of the Saudi financial market (Tadawul). This index was launched in 2003 to serve as the official measure of the performance of the Saudi stock market, encompassing all companies listed in the main market, excluding the parallel market (Nomu). The index is calculated based on the market capitalization of free-floating shares for each company, making it a reliable measure for assessing the health and overall movement of the market. The components of the TASI Index are periodically reviewed every three months to include new companies that meet the criteria and exclude companies that have been suspended or delisted. The base of the index is set at 1000 points, which it started from at inception, and it is updated in real-time during market sessions. Through the distribution of weights among sectors, the TASI Index reflects the dynamics of the Saudi economy and allows followers to understand changes in the local investment environment.

The TASI Index is calculated using a market capitalization weighted methodology, where only the free-floating shares available for trading for each listed company are considered. The index is computed by summing the market capitalizations of the free-floating shares of the companies included in the index, then dividing this sum by the market capitalization at the base period and multiplying the result by the reference index value (1000 points). The Saudi financial market reviews the weights of companies quarterly, updating the weights with the entry or exit of companies based on market developments. Any significant change in the capitalization of a major company like Saudi Aramco may lead to a substantial change in the index's movements. This method is a global standard in index construction, enhancing the credibility of TASI as a benchmark for measuring the performance of the Saudi market as a whole.

The TASI Index has undergone numerous developments since its launch in 2003. Initially, the index included a limited number of companies, but it gradually expanded to encompass hundreds of companies as the market opened and new sectors entered. The index has experienced periods of rise and fall linked to local and global events, such as the 2006 crisis, the repercussions of the 2008 global financial crisis, the recovery period after 2016, and the current phase of investment openness under Vision 2030. In recent years, the number of listed companies has increased, and sectors have diversified, enhancing market depth. The TASI Index fluctuated between levels of 9,800 and 11,500 points in 2024 and 2025, influenced by oil prices, liquidity flows, interest rate policies, and the listing of giant companies like Aramco, which significantly altered the index's weights.

The TASI Index reflects the sectoral diversity of the Saudi economy. The energy sector (led by Saudi Aramco) and the financial sector (commercial banks such as Al Rajhi and National Commercial Bank) hold the largest share of the index. Following these are the materials sector, which includes chemicals and petrochemicals (such as SABIC), and the telecommunications sector (such as STC), along with the industrial, cement, healthcare, insurance, and utilities sectors. The weight of each sector varies according to the market capitalization of its companies and the number of free-floating shares listed. For example, Aramco alone represents about 10-15% of the index's weight, while the banking sector constitutes nearly a quarter of the index at certain times. The performance of these sectors directly impacts TASI's movements, making the index sensitive to oil events, monetary policies, and the financial results of major banks.

The TASI Index is known for its fluctuations linked to local and international economic conditions. In 2024, the index ranged between 9,800 and 11,500 points, reaching its peak in mid-year with improved oil prices and strong results from major companies, then declining during periods of global tensions or liquidity downturns. In 2025, the index stabilized around 10,800–11,000 points. This performance demonstrates the resilience of the Saudi market and its ability to overcome crises. Historically, the index has reflected periods of economic recovery with increased government spending and expansion of non-oil sectors, alongside strong correction periods following financial crises or declines in oil prices. Therefore, the TASI Index is considered a mirror of investor confidence in the Saudi market.

Recent financial data indicates that the TASI Index has attractive indicators compared to regional markets. By mid-2025, the average price-to-earnings (P/E) ratio was around 15-18 times, a competitive level compared to developed markets. The dividend yield for the index as a whole is estimated between 3% and 4%, meaning that the constituent companies distribute a good portion of their profits. The total market capitalization of the companies included in the index amounts to tens of billions of riyals, concentrated in large companies. The market experiences high daily liquidity rates, especially in leading sectors. This balance between return and risk enhances the attractiveness of the TASI Index for investors seeking relative stability and periodic returns.

The TASI Index plays a pivotal role in assessing the health of the Saudi stock market. Local and foreign investors use the index as a primary reference to measure market performance and the Saudi economy. When comparing the performance of a specific stock with TASI's movement, one can determine whether the stock is outperforming or lagging behind the market. Most investment funds and exchange-traded funds (ETFs) rely on the TASI Index as a tracking index, making it an important tool for collective investment covering the entire market. Additionally, financial analysts depend on TASI's movement to derive signals about investor sentiment, predict economic shifts, and assess risk levels in the Saudi market.

The Saudi market is known for its direct sensitivity to fluctuations in global oil prices, as the energy sector holds a significant weight in the TASI Index. When oil prices rise, the profits of leading companies increase, boosting investor confidence and supporting the index's rise. Conversely, a decline in oil prices can pressure the profits of major companies and potentially lower the index. On the other hand, global liquidity and U.S. interest rate policies affect the Saudi market, as rising global interest rates increase borrowing costs and lead to changes in capital flows. Nevertheless, the Saudi market has shown relative resilience in recent years, thanks to the stability of local monetary policy and support for economic reforms.

In addition to the TASI Index, there is the Nomu Index, which measures the performance of the parallel market designated for small and medium-sized enterprises. TASI includes large companies with strict disclosure and capitalization requirements, while Nomu includes smaller or emerging companies. In August 2025, Nomu reached approximately 26,633 points, reflecting activity in the small business sector. Nomu is often used as an indicator to gauge the performance of less mature or riskier sectors, while TASI remains the primary reference for investors seeking stability and high liquidity. Comparing the two indices provides a comprehensive view of the dynamics of the Saudi market across its various segments.

In recent years, significant regulatory reforms have taken place in the Saudi market as part of Vision 2030. The market has gradually opened up to foreign investors, expanded the range of financial products, and facilitated listing procedures. The Capital Market Authority (CMA) has also intervened to assess mergers and acquisitions and regulate transparency and disclosure for listed companies. All these factors have contributed to increased liquidity, enhanced market attractiveness, and bolstered investor confidence. These reforms have improved the performance of the TASI Index, attracted local and international capital, and expanded the base of institutional investors. They have also led to an increase in the number of listed companies and the diversity of sectors represented in the index.

The Saudi financial market (Tadawul) provides a comprehensive electronic platform for tracking TASI Index data in real-time, including market summaries, stock prices, and periodic reports on index performance. The Capital Market Authority (CMA) also publishes analytical reports and official statistics about the index and its components. Additionally, platforms like Argaam provide daily analyses and news related to the Saudi market. Interested parties can refer to these sources to keep up with the latest indicators, company news, and dividend distributions. Investors should review this data periodically to ensure accurate tracking of the TASI Index and its ongoing changes.

The TASI Index is the primary benchmark relied upon by investment funds and exchange-traded funds (ETFs) in Saudi Arabia. These funds aim to replicate the index's performance, providing investors with exposure to the entire market without the need to select individual stocks. Investors also use TASI to compare the performance of their portfolios with the overall market, assessing the effectiveness of their investment strategies. For foreign investors, TASI serves as an entry point to study the Saudi market and understand its dynamics. The index also provides historical and analytical data that aid in building investment strategies based on objective criteria.

When comparing the TASI Index with regional indices such as the Abu Dhabi and Dubai markets or the MSCI Emerging Markets Index, it appears that TASI enjoys competitive valuation rates and relatively higher dividend yields. The average P/E in the Saudi market is lower than in some developed markets, indicating a more conservative valuation. The dividend yield is higher than the global average due to Saudi companies' commitment to generous dividend distribution policies. Additionally, the depth and high liquidity of the Saudi market enhance TASI's position as a strong index in the region. However, TASI remains more sensitive to oil factors and liquidity compared to some sector-diversified markets.

The TASI Index witnessed a series of impactful events in 2024 and 2025, including major companies announcing strong profits and cash distributions, and mergers and acquisitions in key sectors such as insurance and cement. The market also recorded high daily trading levels, especially in the banking and energy sectors. The Capital Market Authority introduced new amendments to disclosure requirements and allowed the entry of innovative financial products, contributing to increased transparency and attracting more liquidity. These developments indicate the vitality of the Saudi market and the dynamism of the TASI Index as an indicator reflecting ongoing economic development and investment transformations.