Saudi Arabia’s Tadawul stock exchange has introduced a new index that monitors the top 50 companies based on their market value on the largest bourse in the Arab world.
The TASI 50 index includes companies accounting for 90 per cent of Tadawul’s free float market cap, with a minimum annual traded value ratio of 5 per cent, ensuring active trading and preventing inclusion of illiquid or rarely transacted companies, according to a statement on the exchange’s website.
This index, suitable as a benchmark for exchange-traded funds (ETFs), futures, and options, represents a “comprehensive view of the market’s largest companies,” Tadawul stated.
Mohammed Al Rumaih, CEO of the Saudi Exchange, commented, “This index offers a benchmark for investment products, allowing investors to track and benchmark performance based on specific criteria. With this index, both local and foreign investors can access a diverse range of investment opportunities in our dynamic and growing capital market.”
Saudi Arabia Takes Steps to Attract Global Investors, Reduce Oil Dependency
Saudi Arabia, the largest economy in the Arab world, has implemented various measures to attract international investors, aiming to diversify the economy and reduce dependence on oil.
Tadawul, ranking among the top 10 global stock markets, became the third publicly traded regional stock exchange after the Dubai Financial Market and Boursa Kuwait when it was listed in December 2021.
The launch of the TASI 50 Index aligns with the Financial Sector Development Programme of Saudi Vision 2030, according to Tadawul.
The broader GCC region, including Saudi Arabia, has witnessed a surge in initial public offerings (IPOs) driven by strong investor demand and economic rebound from the pandemic-induced slowdown.
The Mena region’s IPO volume rose by 44 per cent annually in the second quarter of 2023, with Saudi Arabia and the UAE leading the growth, as reported by global consultancy EY.
Notably, regional broadcaster MBC Group recently raised 831 million Saudi riyals ($222M) in an IPO, marking a significant milestone amid robust investor demand, according to The National News.
