Saudi Arabia’s Tadawul stock exchange has unveiled a new index that tracks the top 50 companies ranked by market value.
The new TASI 50 index allows both local and foreign investors to access a wide range of investment opportunities on the Middle East’s largest stock exchange.
The Saudi Tadawal is one of the top 10 global stock markets in the world and became the 3rd publicly traded stock exchange in the GCC in 2021.
What is the TASI 50 Index?
The TASI 50 Index is a comprehensive list of the 50 highest-ranked companies on the Tadawul stock exchange regarding market value. Companies must have a minimum annual traded value ratio (ATVR) of 5 percent to qualify for inclusion in the index.
This criterion ensures that the index reflects the most actively traded companies in the market, providing a more accurate picture of the market’s overall performance.
The Significance of the TASI 50 Index
Launching the TASI 50 Index is a significant milestone for the Saudi capital market. It provides a valuable benchmark for investment products, enabling investors to track and compare performance based on specific criteria.
“This index offers a benchmark for investment products, allowing investors to track and benchmark performance based on specific criteria,” said Mohammed Al Rumaih, chief executive of the Saudi Exchange. “With this index, both local and foreign investors can access a diverse range of investment opportunities in our dynamic and growing capital market.” — Mohammed Al Rumaih, CEO of the Saudi Exchange.
Moreover, the index opens up a diverse range of investment opportunities for local and international investors, contributing to the ongoing development and growth of the Saudi economy.
TASI 50 Index and Saudi Vision 2030
The TASI 50 Index is a key initiative aligned with the Financial Sector Development Program of Saudi Vision 2030. This ambitious national program aims to attract international investors, diversify the economy, and reduce the country’s dependence on oil.
Introducing the TASI 50 Index is a significant step towards achieving these objectives, offering a reliable, comprehensive tool for investors interested in the Saudi market.
Largest Saudi Arabian (Tadawul) Stocks by Market Cap
Saudi Arabia’s dynamic stock market, Tadawul, boasts several prominent companies, with market capitalization as a key metric for their financial standing. Here are the top 10 largest companies listed on the Tadawul.
- Aramco (Saudi Arabian Oil Company): Saudi Arabian Oil Company, also known as Aramco, is the world’s most valuable oil company with a market cap of $2 Trillion. Despite the challenges in the energy sector, Aramco has managed to maintain steady growth with a 1-year return of 13.8%.
- Al Rajhi Banking and Investment: Al Rajhi Bank, with a market capitalization of $93.07 billion, is one of the largest banks in Saudi Arabia. It has shown a positive 7-day return of 3.2% and a 1-year return of 15.5%.
- Saudi National Bank: The Saudi National Bank is another heavyweight in the banking sector. It has a market cap of $68.16 billion and a promising 7-day return of 7.2%.
- Saudi Basic Industries: Saudi Basic Industries, also known as SABIC, is a leading player in the materials sector. With a market cap of $64.88 Billion, it’s one of the largest public companies in Saudi Arabia.
- Saudi Telecom: Saudi Telecom, with a market cap of around $54.37 Billion, is the leading telecom company in Saudi Arabia. It shows a positive 7-day return of 2.7%.
- ACWA POWER: ACWA POWER, with a market cap of $46.88 Billion, is a significant player in the utility sector in Saudi Arabia. It shows a negative 7-day return of -0.3% but a positive 1-year return of 48.3%.
- Saudi Arabian Mining Company (Ma’aden): Ma’aden, with a market cap of $46.33 Billion, is one of the most significant players in the mining industry in Saudi Arabia. Despite a slight dip in the 7-day return, it has maintained a steady growth trajectory.
- Dr. Sulaiman Al Habib Medical Services Group: Dr. Sulaiman Al Habib Medical Services Group, with a market cap of $27.60 Billion, is a key player in the healthcare sector in Saudi Arabia. It shows a 7-day return of 0.6%.
- Riyad Bank: Riyad Bank, a staple in the Saudi banking sector, has a market cap of $22.80 Billion. Despite a slight dip in 7-day return (-0.2%), the bank’s strong financials suggest potential for long-term growth.
- Alinma Bank: Alinma Bank, Rounding off our top 10 list, is Alinma Bank, another major player in Saudi’s banking sector. With a market cap of $22.06 Billion and a healthy 7.9% 7-day return, Alinma is poised for continued success.
Financial Sector Development Program
The Financial Sector Development Program, launched in 2018, aims to transform Saudi Arabia’s financial landscape, concentrating on banking, insurance, stock markets, and debt markets. In collaboration with the Saudi Central Bank (SAMA), the program enhances accessibility to banking services.
Teaming up with the Capital Market Authority (CMA) contributes to developing a diverse capital market. The program’s focus on strengthening financial institutions propels the Kingdom’s financial market forward, fostering growth and competitiveness.
The Future of the TASI 50 Index
The TASI 50 Index will likely become an increasingly important tool for investors and market analysts. The index will provide a valuable snapshot of the market’s evolving landscape as the Saudi economy grows and diversifies.
The TASI 50 Index is expected to inform investors about the most significant developments in the Saudi market, promoting greater transparency and fostering a more dynamic and inclusive investment environment.
The Impact on Exchange-Traded Funds (ETFs), Futures, and Options
The TASI 50 Index is not just significant for investors in individual companies. It also offers a benchmark for exchange-traded funds (ETFs), futures, and options.
These investment EFTs can use the TASI 50 Index to track the performance of the largest companies in the Saudi market, providing a more comprehensive view of the market’s overall performance.
Saudi Arabia’s Position in the Global Stock Market
The Saudi Tadawul is one of the world’s top 10 global stock markets. In 2021, it became the third publicly traded stock exchange in the Gulf Cooperation Council (GCC), following the Dubai Financial Market and Boursa Kuwait.
The launch of the TASI 50 Index further enhances Tadawul’s position as a leading global stock exchange.
Saudi Arabia’s Efforts to Draw Foreign Investment
The kingdom has introduced measures to make its markets more attractive to international investors. These include regulatory reforms, efforts to improve market transparency, and initiatives to encourage greater participation by foreign investors.
Saudi Arabia’s TASI 50 Index debut aligns with efforts to attract foreign investment. In September, Tabby, a buy now, pay later platform with a unicorn valuation of $1.5 billion, announced plans to relocate to Saudi Arabia for IPO preparations and plans to list on the Saudi Tadawul Stock Exchange
A New Era for the Saudi Stock Market
The launch of the TASI 50 Index marks a new era for the Saudi stock market. This innovative tool offers investors unprecedented insight into the performance of the market’s leading companies.
As Saudi Arabia continues to pursue its Vision 2030 objectives, the TASI 50 Index is poised to play a key role in the country’s economic transformation. This exciting development is just another sign of the progress and innovation that characterize Saudi Arabia’s forward-looking approach to economic growth.