S&P: Tadawul key to economic transformation

Tadawul trading screen

S&P Global stated that the Saudi Exchange (Tadawul) plays a pivotal role in the Kingdom’s economic transformation, serving as a strategic platform to attract capital to support Vision 2030 investments.

The credit agency added that the efforts of Saudi authorities to develop Tadawul would help attract domestic and international capital, which will increase market liquidity for the long term.

This trend, along with the substantial financing needs of Vision 2030 projects, is expected to continue driving market growth, the agency said. However, it acknowledged current global macroeconomic risks that could negatively affect all stock markets.

"Tadawul, compared to other major global equity markets, remains dominated by large government-related entity issuers and has relatively low, albeit gradually increasing, trading volumes and foreign participation," S&P Global noted.

It added that Saudi Arabia’s ongoing initiatives to improve market liquidity and increase foreign shareholdings on Tadawul, such as a new investment law and pension fund reforms, should help grow portfolio inflows.

According to the agency, the development of local stock markets supports the Kingdom’s credit conditions, allowing companies to diversify funding sources and access long-term capital.