The market capitalisation of Saudi Stock Exchange (Tadawul) has surged by 463% over the last ten years to reach $2.7 trillion at the end of 2024, making it the largest equity market in the Middle East, according to S&P.
The significant growth has been driven by the kingdom’s drive to boost market liquidity by getting local companies listed, with the 91 initial public offerings (IPOs) between 2014 and 2024 raising an aggregate of around $65 billion.
With the flurry of listings, the number of issuers on Tadawul’s main market jumped to 247 in 2024 from 169 in 2014.
The main bourse has logged the highest trading volumes in the GCC region, and it is now ranked as one of the largest exchanges among emerging markets in terms of market capitalisation, the ratings agency said. It is also the largest emerging equity market outside Asia.
However, despite witnessing robust growth over the last ten years, the ratings agency said the Saudi market remains relatively modest compared to other global indices in major markets.
It noted that government-related entities (GREs), such as the sovereign wealth fund, the Public Investment Fund, and public pension fund GOSI account for the bulk (nearly 64%) of Tadawul’s total capitalisation as of April 17, 2025. Since these entities are typically not frequent traders, Tadawul’s trading volume tends to be smaller when compared to other major markets outside the region.
“As of year-end 2024, about 67% of the exchange’s market capitalisation came from Aramco’s $1.8 trillion value, while the seven largest issuers represented more than 80%. Of these seven issuers, other than Al Rajhi, all are GREs,” S&P said.
And while numerous privately owned companies have launched IPOs, public-sector entities still represent the bulk of new listings, generating around $44 billion of the estimated $65 billion of aggregate IPO value over the last ten years.
The ratings agency, however, noted that with Saudi Arabia’s initiatives like the pension and investment law reforms, the kingdom could attract more foreign investors and advance its equity markets.
“As the Saudi Arabian government rolls out its Vision 2030 program and international investors enter the market, we anticipate a rise in trading activity,” S&P said.
“This should bode well for Tadawul and the country as a more liquid equity market allows shareholders to monetise their holdings, and raise liquidity.”
© ZAWYA 2025
