Tadawul All-Share Index (TASI) - A Report Brought to You by Q8 Trade
TASI stands for Tadawul All Share Index. Tadawul is the name of the financial market in the Kingdom of Saudi Arabia. TASI is the index that measures the overall activity of the Saudi financial market which is considered the most active financial market in the GCC area.
The Tadawul is the only trading market for trading in Saudi Arabia and is ranked 10th globally in the stock and commodity market and TASI measure the performance of it.
Historical Analysis of Saudi Stock Exchange Tadawul – TASI
The Saudi stock market started with limited joint-stock companies, mainly Arab Cement, Riyad Bank and Saudi National Bank before the 1980s. Banks were the nucleus on which the market initially relied.
Trading in shares, whether selling or buying, was limited due to the lack of listed companies. These transactions were not subject to any supervision or supervision by the Saudi government. The sale and purchase transactions were based on the supply and demand between the seller and the buyer. The price was directly agreed upon. The shares are then transferred by the competent management of the shareholders’ affairs of the company or by a pledge approved by the chambers of commerce or a bank. The menu at that time.
In the 1980s, the number of shareholding companies increased and their shares were put up for the public trade. In 1983, the king issued a decree stipulating the need to establish a joint committee to finance the Ministry of Finance, the Ministry of Commerce and the Arab Monetary Corporation to be responsible for the trading of shares in partnership with the stock control department located in the banking departments of SAMA.
A year later, a company was established to be responsible for registering and transferring the ownership of the shares and doing all the things related to the documentation, namely the Saudi Company for the registration of shares where the capital was then 11 million riyals.
The year 1989 saw a significant shift in the trading world and in the Saudi stock market. Al Rajhi Exchange and Trading Company decided to change its type from a joint stock company to a Saudi joint stock company and its shares were offered for the first time in the Kingdom. As the demand for shares of banks and major companies such as SABIC and Al Rajhi increased, the market recovered and its popularity increased among traders.
In 1990, the Kingdom introduced the electronic system on trading but because of the Iraq and Kuwait war, the stock market was affected and dropped. However, it rose again after the war and reached its peak in 1992.
Stocks have gone up too much and they do not reflect the real value of the market which has led to a caution on traders and stocks have begun to fall sharply as a result of mass selling and this led to the bankruptcy of many shareholders in companies. In 1995, the value of the Tadawul market deteriorated to a mere 1140 points where it was felt in the performance of TASI.
After that, the Saudi stock market started to stabilize and had a weighted rise. By the end of 1997, the main index reached 2001 points. Several factors influenced this positive trend including the economic improvement in the Kingdom. The oil price rose above $22 for the first time after the Gulf War and Saudi Arabia reduced its interest rates on the Saudi riyals. The United Bank merged with Banque du Caire and became the United Saudi Bank. The capital of Saudi companies, including Arab Bank, Banque Saudi Fransi, South Cement and others, rose.
But then the market retreated as the index fell to 1313 points as the economic crisis occurred in East Asia which affected the overall market and the petrochemical sector in particular.
The Saudi stock market was affected by the decline in oil prices to below $12 a barrel in 1999, in addition to the rise in interest rates on the riyal and the decline in demand for cement.
The kingdom has tried to intervene to end the recession that it expected to dominate the economy and the Ministry of Commerce has asked shareholding companies to reduce the value of their nominal shares from $100 to $50 in order to increase market liquidity. The first foreign investors’ fund was established in the Saudi market where it was traded on the London Stock Exchange.
The Saudi stock market rebounded again after the surge in oil prices, major mergers in companies and the announcement of the imminent establishment of an official capital market.
Many companies included shares in the Saudi market, led by Zamil and Chemical and the capital of many companies was increased especially in the banking and petrochemicals sector.
The Saudi market remained so until 2003 and since then, the market has risen. The main index rose to 20,966 points. This strong rise has many reasons: The Kingdom’s announcement of its public budget with a surplus of 45 billion riyals in 2003 and 98 billion riyals, the rise of oil to more than $70 in 2004, the adoption of a new system of the Saudi capital market, the appointment of members of the Capital Market Authority and allowing the citizens of the Gulf Cooperation Council to trade shares of banks and insurance.
In February 2006, the Saudi market collapsed and the number of listed companies reached only 76. This resulted in a market loss of nearly one trillion riyals. Many traders went bankrupt. The market witnessed a collective sell-off. Nearly 1.5 million shares were sold in the first minute of trading and shares lost more than 144.5 billion riyals of their value.
The situation remains so, influenced by the variables rapidly, as the market rises and falls as a result of decisions or data and economic reports in Saudi Arabia.
How is the value of the Tadawul TASI market determined?
The value of a trading market is determined by the value of the shares listed in it. The total market value increases in the case of the increase in the value of the listed shares and vice versa, where the value of the shares decreases. Of course, this value changes almost instantaneously over the five trading days from Sunday to Thursday.
What makes the Tadawul TASI market interesting to trade?
One of the most attractive things for investors and traders is that it is a local market. You are well aware of what is happening because you are in the middle of the market and you can expect what will happen in the market as you are an Arab citizen. Saudi Arabia has a lot of influences that can affect circulation.
Is Tadawul TASI trading profitable?
There is no absolute answer but yes, it has many opportunities that investors can take advantage of. For example, you can trade the main index of the Saudi stock exchange in addition to certain stocks you want to invest in.
The most important factors that make it a profitable market are:
- Diversification: The most important feature of the Saudi money market is that it is a diversified market comprising various sectors including banking and financial services, petrochemicals, cement, retail trade, energy and utilities, agriculture and industry, communications, insurance, investments, real estate, transportation, media, hotels, and tourism. This is in addition to the diversity of listed stocks as well.
- Volume: The Saudi stock market has large volumes of trading which makes this market characterized by a lot of liquidity.
- Local linkage: Local connection with the market increases the chances of making profits. By following the economic and political conditions in the region, you can predict what will happen in the coming days.
However, before deciding which currency pair you would like to trade, we highly encourage you to learn more about what would you get from the platform that you choose to trade with and what are the advantages you will be getting from choosing a certain platform over another.
What are the factors affecting the performance of the Tadawul TASI?
The Tadawul (TASI) market is affected by many factors. From the historical perspective, you can know some of these factors, namely:
- The economic situation in Saudi Arabia: When the economic conditions in Saudi Arabia are good, this affects the circulation of the positive and vice versa in the case of economic tensions, whether in the budget or GDP and others.
- Oil: Crude oil prices have a big impact on everything that happens in Saudi Arabia as their exports represent a lot of their revenues so when it rises, prosperity prevails over the Saudi economy.
- Political tensions in the region: The Saudi capital market is affected by any political tensions in the region where it declines when there are political threats to any country in the region as it happened before in the Iraqi invasion of Kuwait and the American-Iranian crises.
How can I trade Tadawul’s TASI?
Trading in a trading market can be done through several options:
- Tasi main index
- Listed shares, including:
- Banking Sector: Saudi British Bank, Saudi Fransi Bank, Saudi Hollandi Bank, Saudi Investment Bank, Arab National Bank, Bank Albilad, Bank Al Jazira, Al Rajhi Bank, Alinma Bank, Riyad Bank, Samba Financial Group and others.
- Petrochemicals Sector: Sipchem, SABIC, SAFCO, Saudi Industrial Investment Group, Alujain, Yansab, Petrochem, Cayman and others.
- Cement Sector: Qassim Cement Company, Southern Region Cement, Eastern Region Cement, Yamama Saudi Cement Co., Tabuk Cement, Yanbu Cement, Najran Cement, Arab Cement, Umm Al Qura Cement.
- Energy & Services Sector: Saudi Electricity Company, National Gas & Industrialization Company, and others.
- Food and Agriculture Sector: SADAFCO, Saudi Fish Company, National Agricultural Development Company, Almarai Company, Savola Group, and others.
- Telecom Sector: STC, Zain, Joe, Etihad Etisalat, and others.
- Insurance Sector: Safaya, Al Rajhi Takaful, Allianz SF, Walaa Insurance, Al Ahlia Cooperative Insurance Company, Saikou, Salameh, Assiage, SABB Takaful, Al Ahli Takaful, Cooperative Insurance and others.
- Multi-industry and investment sectors: Cisco, Al-Ahsa Development, Saudi Arabian refineries, Kingdom Holding, FIPCO, METAL, Saudi Chemical Company, Astra Group, Ma’aden, and others.
- Construction & Construction Sector: Sadak, Misk, Saudi Company for the production of pottery pipes, Saudi pipes, Saudi cable company, and others.
- Real Estate Development Sector: Emaar Economic City, Saudi Real Estate Company, Riyadh Development Company, Taiba Holding, Makkah Construction & Development, and others.
- Transport Sector: Sabtco, Cooler, Saudi Budget, Saudi National Shipping, and others.
- Media & Publishing Sector: Saudi Printing & Packaging Co., Tihama Advertising & Public Relations, and others.
- Hospitality & Tourism Sector: Hospitality, Tourism Projects, Al Tayyar Holding, Al Hokair Group, and others.
How do you start trading Tadawul TASI with Q8 Trade?
Select a financial instrument:
You can choose the financial instrument Tadawul TASI.
Q8 Trade offers more than 300 global or local financial assets, including trading, gold, oil, major forex pairs, digital currencies and more.
- Select the trades you want to open:
Select the transaction type, size, date, and everything.
- Manage the risks:
You can set Stop Loss or Take Profit orders.
Watch your deal:
Watch your deal to make sure you get what you want.
Why should you trade in the Saudi stock market with Q8 Trade?
- Q8 Trade offers leverage so you will need a little capital to start your deal.
- Q8 Trade offers real-time pricing which makes it useful for you to buy or sell.
- Q8 Trade follows the local market closely, to find out any events, reports or data that will affect trading in the Saudi stock market.
- It has a trading platform that works on computers and tablets, which allows you to track your investments and trades anytime, anywhere.
- You can deposit in local currency (Saudi Riyal, Kuwaiti Dinar) and others.
- Withdrawals from your bank account take about 1 to 12 days.