Saudi Arabia’s Tadawul All Share Index Market Capitalization Surges to Over $2.9 Trillion
Saudi Arabia’s Tadawul All Share Index market capitalization has surged to over $2.9 trillion in June, up from $420 million in 2015, according to a report by S&P Global Ratings. The increase indicates solid economic fundamentals and positive investor sentiment in Saudi Arabia. The Tadawul and the Capital Market Authority have launched several initiatives to expand the capital market in recent years as the Kingdom seeks to diversify its economy in line with the Vision 2030 initiative.
Streamlining the Listing Process and Investing in Market Infrastructure
The Tadawul and the Capital Market Authority have streamlined the listing process and made significant investments in market infrastructure. These institutions approved regulations to ease foreign investors’ access to Saudi capital markets and implemented policies to improve corporate governance standards and transparency. The initiatives have contributed to the growth of the market capitalization of the Tadawul All Share Index.
Saudi Stocks Gain International Exposure
In 2019, Saudi stocks gained international exposure after being added to the MSCI Emerging Markets Index, FTSE Russell, S&P Dow Jones, and other indices. By market capitalization and trading volume, Tadawul is the biggest stock market in the Middle East and North Africa region. The initial public offering of Saudi Arabian Oil Co. in 2019 was a significant event, and several other Saudi entities have entered the equity market since then.
Saudi Debt Market Evolution Expected to Outpace Developed Markets
S&P Global Credit Analyst Timucin Engin stated that given the significant economic transformation expectations and funding needs associated with Vision 2030, they expect Saudi debt market evolution to potentially outpace that seen in some other developed markets. “Government-related entities, major financial institutions, and key blue-chip corporates will initially lead the way,” he added. The report, titled “Saudi Arabia’s Debt Market: Ready For Takeoff,” suggested a robust and high-quality local debt market is essential for the economy to grow and change and support the funding requirements stemming from large Vision 2030 projects.
Conclusion
The growth of the market capitalization of the Tadawul All Share Index indicates solid economic fundamentals and positive investor sentiment in Saudi Arabia. The Tadawul and the Capital Market Authority have launched several initiatives to expand the capital market in recent years as the Kingdom seeks to diversify its economy in line with the Vision 2030 initiative. The initiatives have contributed to the growth of the market capitalization of the Tadawul All Share Index. The Saudi debt market is expected to evolve and potentially outpace that seen in some other developed markets, supporting the funding requirements stemming from large Vision 2030 projects.