As Saudi Arabia heads into the final stretch of 2025, the Saudi Stock Exchange (Tadawul) is finishing the year in a tense, valuation-sensitive mood—caught between supportive domestic monetary conditions and stubborn external headwinds led by oil-market weakness.
Because Saturday, 20 December 2025 is a weekend in Saudi Arabia (Tadawul’s main market typically trades Sunday–Thursday), the most recent price signal comes from Thursday’s close (18 December)—when the Tadawul All Share Index (TASI) ended at 10,450.27, up 0.35% on the day. Arab News
That close matters because it followed a rough patch: TASI closed at 10,414.06 on 17 December, described by Reuters as its lowest close in more than two years, before stabilizing and rebounding. Reuters
The story of Tadawul right now is not one dramatic headline—it’s the collision of three big forces:
- Oil prices leaning on energy-heavy Gulf markets
- Lower interest rates improving domestic liquidity and financing conditions
- A cooler risk appetite—visible in IPO performance, broad selloffs, and a market that’s acting picky again
Here’s what’s driving the Saudi stock market as of 20 December 2025, what the latest published analyses are saying, and what investors are watching for early 2026.
Where Tadawul stands now: a rebound, but from a bruised base
By the numbers, the market is still digesting a difficult 2025.
- TASI closed 18 Dec at 10,450.27 (up 0.35% on the session). Arab News
- Just a day earlier, TASI closed 17 Dec at 10,414.06, and Reuters flagged it as a more-than-two-year low close. Reuters
- On 16 Dec, Reuters reported the index fell 1.3% to end around 10,453, with the oil move highlighted as a key driver. Reuters
Local-market data also shows the pain has been broad, not isolated:
- On 16 Dec, 47 TASI-listed companies fell to 52-week lows in that session, according to Argaam’s compilation—an “internal breadth” signal that selling pressure has not been limited to one sector. Argaam
- Argaam’s month-end review showed November 2025 fell 9.1%, the index’s worst monthly decline in three years, and said the index was down about 12% from January through end‑November. Argaam
This sets the backdrop for what markets tend to do next: at year-end, they stop caring about “stories” and start caring about cash flows, dividends, oil sensitivity, and what 2026 earnings realistically look like.
The macro drivers: oil, rates, and the Saudi fiscal narrative
1) Oil prices are still the market’s loudest background noise
Gulf equity markets are famously “oil-adjacent,” and Tadawul is no exception—especially with Saudi Aramco’s weight in the index and oil’s influence on government revenues and sentiment.
Reuters coverage through mid-December repeatedly linked Saudi market weakness to falling crude. For example, on 14 Dec, Reuters reported Saudi’s main index fell as oil prices dropped, noting oil had posted a weekly decline and calling out the pressure across major sectors. Reuters
Even when Saudi stocks bounce, they’re often bouncing with oil, not independently.
2) Interest rates turned from headwind to tailwind
Saudi monetary policy has been moving in the “easing” direction, largely in step with the Fed due to the riyal’s dollar peg.
Official Saudi Central Bank (SAMA) information shows:
- Repo rate: 4.25% on 10 Dec 2025 (with earlier entries showing step-downs in 2025). SAMA
- SAMA also published a statement noting it reduced the Repo rate to 4.25% and Reverse Repo to 3.75%. SAMA
Rate cuts matter for Tadawul because they typically:
- reduce financing costs for leveraged sectors (real estate, some industrials),
- support credit growth and banking activity (though bank margins can be nuanced),
- improve “risk asset” appeal versus cash.
The catch: easier money helps, but it doesn’t fully cancel out weaker oil-linked sentiment.
3) The fiscal backdrop is getting more complicated—and markets notice
Saudi Arabia’s fiscal story has become a bigger part of daily trading psychology than it was a few years ago, because the market now tries to price how much spending intensity Vision 2030 can sustain under different oil and dividend scenarios.
Reuters reported that Saudi Arabia expected a 2026 budget deficit of 165 billion riyals.
And Reuters also explicitly connected the deficit expectation to market pressure during a down session in mid-December. Reuters
That doesn’t mean markets are betting against Vision 2030. It means they’re doing what markets do: discounting and repricing risk around funding sources, dividends, and the cost of capital.
Corporate and capital markets news: the items investors are actually talking about
Kingdom Holding’s xAI stake: a Tadawul-linked AI headline (and a sentiment tell)
One of the most widely circulated Saudi-bourse-related headlines dated 20 December 2025 is about Kingdom Holding Company (KHC).
Asharq Al-Awsat reported KHC acquired a stake in xAI (Elon Musk’s AI company) for 1.5 billion Saudi riyals (about $400 million), describing it as part of xAI’s Series C round, and noting it was disclosed via a Tadawul filing. Asharq Al-Awsat
Why this matters for the market narrative:
- It reinforces how Tadawul-listed groups increasingly want exposure to global tech themes.
- It’s also a reminder that, even in a down year, Saudi liquidity still finds “future-growth” stories—just more selectively.
Ma’aden’s phosphate growth catalyst: feedstock approval
Ma’aden remains one of the market’s closely watched industrial bellwethers, and project milestones tend to travel quickly through the investor ecosystem.
A Ma’aden-related disclosure reported approval from Saudi Arabia’s Ministry of Energy for a feedstock allocation tied to a phosphate project initiative. Eurolandir
In a market looking for credible 2026–2030 earnings engines beyond oil, mining and downstream industrial scale-ups remain a major theme.
Cenomi Centers and the “debt capital markets” moment: sukuk listed on Tadawul
Equities may dominate headlines, but Saudi’s capital markets story increasingly includes sukuk issuance and secondary market activity.
White & Case reported advising Cenomi Centers on establishing a SAR 4.5 billion retail sukuk programme, and said the inaugural issuance comprised SAR 2.05 billion sukuk due 2031, which were admitted to listing on Tadawul and drew strong domestic demand. White & Case LLP
This is part of a broader pattern: Saudi corporates are leaning harder into local-currency funding and a deeper domestic investor base—especially when equity valuations are under pressure.
Tadawul Group’s own “market plumbing” push: WAMID launches DataHub
If you want a signal about where the exchange operator thinks the market is going, look at its infrastructure bets.
WAMID—Saudi Tadawul Group’s technology and innovation subsidiary—announced the launch of “DataHub,” positioned as a centralized data platform. Wamid
This is “boring” in the way that market structure is always boring—right up until it isn’t. Better data distribution and market infrastructure tends to support:
- institutional participation,
- product development (indices, derivatives, structured products),
- and the kind of transparency that global allocators demand.
IPOs, listings and Nomu: enthusiasm didn’t die, but it got picky
Saudi Arabia has spent years building one of the region’s most active IPO environments. In 2025, however, performance has pushed investors toward selectivity.
A Gulf Capital Market Association (GCMA) repost of IFR reporting noted that of 13 main-market IPOs that priced and started trading in 2025, only five traded up on debut—and three of those five happened before the summer. Gulf Capital Market
That’s not an IPO shutdown. It’s an IPO quality filter.
Meanwhile, reforms and rule updates continue—especially around the parallel market.
- Argaam reported Tadawul announced the Capital Market Authority approved amended Listing Rules on 24 Nov 2025. Argaam
- A summary of the rule changes highlighted a higher minimum market-capitalization threshold (as reported by Lexis Middle East). Lexis Middle East
On the pipeline side, Arab News reported that two Saudi cybersecurity firms were considering Tadawul listings between 2026 and 2027, citing comments to a local business outlet. Arab News PK
So the IPO story as of Dec 20 is basically:
- Listings still coming
- Debut-day easy wins less common
- Rules evolving
- Investor standards rising
What forecasts and market analysis are saying as of 20 Dec 2025
Forecasts should always be treated as conditional narratives, not prophecies carved into stone. Still, investors crave a map—even one drawn in pencil.
A market-wide analysis page updated 20 Dec 2025 (Simply Wall St, using aggregated company financials) describes:
- Market performance: 1Y -16.5%, YTD -15.2% (as of their update date), with weakness “in every sector,” especially energy. Simply Wall St
- Forward view: earnings forecast to grow by 8.5% annually. Simply Wall St
- Valuation snapshot: market cap around SAR 8.8 trillion and a stated P/E ~17.6x (per their aggregated view). Simply Wall St
Takeaways (without pretending forecasting is magic):
- The market is not being priced like a bubble.
- The rebound case for 2026 is basically: rates down + earnings stabilize + oil stops being a menace.
- The bear case is: oil stays weak + fiscal worries grow + investors demand higher risk premia.
What to watch next week and into early 2026
Here are the pressure points most likely to move Saudi equities and Tadawul sentiment over the next 4–10 weeks:
Oil direction and volatility
This remains the most consistent “single factor” influencing daily risk appetite for Saudi equities. Reuters reporting throughout December keeps coming back to oil as a catalyst. Reuters
Rate expectations (Fed → SAMA)
Saudi rates are already lower (repo 4.25% per SAMA), but markets trade the next move, not the last one. SAMA
Fiscal signals and execution
The deficit expectation for 2026 is now part of the market’s base narrative, and it can influence sectors tied to government contracts, real estate development, and consumer confidence. Reuters
IPO calendar and post-listing performance
Given the 2025 debut stats, future IPOs may need sharper pricing discipline—or stronger growth stories—to attract the same momentum. Gulf Capital Market
Breadth and “52-week low” dynamics
When dozens of companies hit fresh lows in a single session, it often signals ETF/portfolio de-risking—not just stock-specific issues—and that can persist until a catalyst flips the tape. Argaam
Capital markets depth beyond equities
Sukuk listings and data/market-infrastructure upgrades are quietly becoming part of the Tadawul growth story—important for foreign participation and product innovation. White & Case LLP
Bottom line for 20 Dec 2025
Tadawul ends 2025 with a market that looks more sober than euphoric—and that’s not automatically bad.
The TASI rebound to 10,450.27 on 18 Dec came after a two‑year‑low close the day before, highlighting how sensitive sentiment has become to macro headlines (oil, rates, fiscal expectations). Arab News
At the same time, the Saudi capital markets machine is still evolving:
- high-profile Tadawul-linked corporate disclosures (like Kingdom Holding and xAI), Asharq Al-Awsat
- industrial project catalysts (like Ma’aden), Eurolandir
- sukuk programme growth and listings, White & Case LLP
- and exchange-operator investments in market data and infrastructure. Wamid
That combination—a pressured index with ongoing structural development—is exactly the kind of environment where 2026 narratives form: not from hype, but from the slow grind of earnings, liquidity, and credible execution.
