Saudi stock market sees collective decline
The Saudi Stock Exchange's main index, TASI, closed Thursday's trading session, the last of the week, with a notable decline of 1.3%, losing approximately 147 points to close at 11,188 points. This drop occurred amidst active trading, with a total value of around SAR 5.5 billion and a trading volume of 238.4 million shares. This performance reflected selling pressure that affected most sectors, with 236 companies' shares declining, while only 28 companies' shares rose out of a total of 268 companies listed on the main market.
General context and importance of the Saudi market
The Saudi Stock Exchange (Tadawul) is the largest and most liquid stock market in the Middle East and North Africa region, and a cornerstone of the Kingdom’s Vision 2030 strategy, which aims to diversify the national economy and reduce dependence on oil. In recent years, the market has undergone significant structural developments, most notably its inclusion in global emerging market indices such as MSCI and FTSE Russell. This has enhanced its attractiveness to foreign investors and deepened its integration with international financial markets. Consequently, the performance of the Tadawul All Share Index (TASI) not only reflects the health of listed companies but also serves as a gauge of investor confidence in the Saudi economy as a whole.
Impact of global and local factors
The performance of the Saudi market is directly influenced by a range of global and local factors. Globally, oil prices play a pivotal role, as any fluctuations in Brent crude prices affect the Kingdom's revenues and, consequently, investor sentiment. Furthermore, monetary policy decisions by major central banks, particularly the US Federal Reserve, directly impact the market due to the Saudi riyal's peg to the US dollar, affecting borrowing costs and the attractiveness of investing in equities. Locally, quarterly corporate earnings, major government projects, and state capital spending are among the most significant drivers that steer the market upward or downward.
Performance of the parallel market “Growth”
On the other hand, and in contrasting performance, the Nomu Parallel Market Index closed slightly higher by 0.2% at 23,865 points. Although trading volumes in Nomu were significantly lower, reaching SAR 17.8 million, its positive performance indicates different dynamics governing this market, which is dedicated to small and medium-sized enterprises (SMEs). These SMEs may be less affected by the pressures facing leading companies in the main market. The Nomu market saw 45 companies' shares decline, while 24 companies' shares rose, out of a total of 125 listed companies.
