Developments in the Saudi Stock Market The Saudi stock market (Tadawul) witnessed notable transformations in 2025, driven by structural reforms, global economic fluctuations, and local factors such as oil prices and monetary policies.
This year represents a turning point in the market’s journey toward attracting more foreign investments, with positive expectations for economic growth. The Saudi stock market, known as Tadawul, is the largest stock exchange in the Middle East and one of the most prominent markets globally.
The market has recorded massive growth over time, with its total value increasing by 463% since 2014 to reach USD 2.7 trillion by the end of 2024.
In 2025, the market experienced significant developments despite initial challenges. The TASI index declined by 4.43% during the first nine months, influenced by liquidity shifting toward long-term debt instruments such as sukuk and bonds—reflecting economic maturity and the financing needs of major Vision 2030 projects.
The market saw a strong rebound in the third quarter, particularly in September, when the index surged by 5% in a single day following reports of easing foreign ownership restrictions. This boosted investment inflows and enhanced the positioning of listed companies.
Moreover, Saudi Arabia’s economic growth forecast has been revised upward to 4% for 2025–2026, according to the International Monetary Fund.
Key reforms and attracting investments
One of the most notable developments in 2025 was the focus on easing foreign ownership restrictions in Saudi companies. At the beginning of September, the main TASI index jumped by 5.1% in a single day, marking the largest daily increase in a long time. This surge came following reports about plans to facilitate foreign access to the market, pushing the shares of Al Rajhi Bank and the Saudi National Bank to their upper trading limits with gains of 10%.
These reforms are expected to strengthen capital inflows into medium-sized companies. In October, Saudi Arabia announced a public consultation on changes to foreign investor regulations, as foreign ownership in equities exceeded 528 billion Saudi riyals.
Index performance and market volatility
The beginning of 2025 witnessed many challenges, as the TASI recorded significant declines in the first nine months, falling by 4.43% with monthly losses.
In the second quarter, the main index dropped, while the Nomu parallel market saw a sharp decline. Nevertheless, the markets experienced a recovery in the second half, with a weekly increase of 1% in October.
In April, the market fell by 6%, marking the largest drop since 2020, influenced also by the markets of Qatar and Kuwait.
These fluctuations reflect the impact of geopolitical risks and market sentiment, as Saudi individual investors account for 52% of trading activity, followed by foreign investors at 33%.
Economically Influencing Factors
Developments in the Saudi Stock Market: The International Monetary Fund has raised its growth forecast for the Saudi economy to 4% for 2025/2026, supported by non-oil expansion. Meanwhile, inflation slowed to 2.2% in September, aiding the completion of economic stabilization.
On the positive side, the interest rate cut generated positive momentum in the fourth quarter, with slight daily gains of around 0.74% in October. Additionally, the reduction of feedstock prices for the petrochemical sector is expected to boost profits, although the impact may take some time to materialize.
Conclusion
In conclusion, the Saudi stock market (Tadawul) witnessed positive developments in October 2025, reflecting sustainable growth and increasing investor appeal.
The Tadawul All Share Index rose by 0.12% on October 18, supported by gains in sectors such as energy, transportation, and consumer goods.
Foreign capital inflows also strengthened market confidence, reaching 1.9 billion SAR in a single week, as investors purchased shares in 145 companies. This momentum was further supported by government plans to allow foreign investors to hold majority stakes.
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