Tadawul
Tadawul brokers offer trading on the Saudi Stock Exchange. This is the largest stock exchange in the Middle East and North Africa (MENA) and one of the biggest in the world, particularly in terms of petroleum and natural gas companies. Owning shares of Saudi Arabian companies is relatively limited for foreign investors but there are other ways you can get involved in the market via online brokers.
Read on to learn about the Tadawul market opening hours, history and how to trade on the Saudi Stock Exchange. We have also listed the top brokers with access to the Saudi Stock Exchange and shared tips for choosing the right platform for your investment goals.
Tadawul Brokers
These are the 1 best brokers for trading on the Tadawul:
#1 - IG
Why We Chose IG
Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
- Regulator: FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA
- Platforms: Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
- Minimum Deposit: $0
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:250 (Pro)
Stock Exchanges
IG offers trading on 20 stock exchanges:
- Australian Securities Exchange (ASX)
- Bombay Stock Exchange
- Borsa Italiana
- Deutsche Boerse
- Dow Jones
- Euronext
- Hong Kong Stock Exchange
- IBEX 35
- Japan Exchange Group
- Korean Stock Exchange
- London Stock Exchange
- National Stock Exchange Of India
- Russell 2000
- S&P 500
- SIX Swiss Exchange
- Shanghai Stock Exchange
- Shenzhen Stock Exchange
- Tadawul
- Taiwan Stock Exchange
- Toronto Stock Exchange
Pros
- IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis
- As a well-established broker, IG operates under strict regulatory guidelines in multiple jurisdictions, maintaining a high level of trust
- The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
Cons
- IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors
- Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges
- IG has discontinued its swap-free account, reducing its appeal to Islamic traders
How To Compare Tadawul Brokers
To invest with brokers that support trading on Tadawul, you will need to open an account through a brokerage that is a member of the exchange. This applies to both the cash and derivatives markets and, brokers that trade in one market might not necessarily work in the other.
Not many international brokers offer access to the Saudi Stock Exchange, so check the Tadawul Member Directory for registered associates. You can also find monthly data on the trading activity of Tadawul brokers and members, including their trade volume on the official exchange’s website.
Here are the key factors to consider when comparing Tadawul brokers:
- Platforms – The best platforms to trade on the Tadawul exchange will depend on your expertise, trading style and strategy. Beginners might be more comfortable with an intuitive and sleek mobile app whereas Tadawul intraday traders may benefit from a more stable desktop download. More experienced investors will require Tadawul brokers to offer advanced platforms with comprehensive analysis tools, such as MetaTrader 4. The best Tadawul brokers will offer a selection of platforms, software and tools, with step-by-step guides on how to place a trade or complete price analysis. Alawwul Invest, for example, provides three web-based terminals, mobile and tablet apps plus the option to place trades on the Tadawul exchange over the phone. Proprietary terminals often integrate unique tools, often with improved execution speeds or favored trading conditions.
- Accounts – Brokers with access to Tadawul will often offer different accounts according to your investment experience and risk appetite. Be mindful of minimum deposit requirements for higher-tier profiles, as these can be costly. If you are a beginner, look for brokers that offer a demo account, where you will be able to access the exchange and practice investing risk-free with virtual funds. The exchange also offers a free simulated profile that you can use to practice new strategies before entering the live environment.
- Fees – Tadawul brokers often charge investors a fixed fee in the form of a commission. Keep an eye out for other costs on top of this. These may include spreads, deposit & withdrawal charges or exchange data subscriptions. Although the cheapest fee schedules can be the most enticing, ensure you are not limited with the resources or data required to be successful. Emirates NBD Securities, for example, offers access to Tadawul with a total commission fee of 0.1306% + VAT per trade. Alongside this, investors benefit from an innovative reward system, intuitive platforms and access to margin trading.
- Instruments – For retail investors in countries outside of the Gulf Cooperation Council, brokers that support trading on Tadawul are your only method of investing in associated stocks. The top Tawadul brokers will provide access to a range of instruments including ETFs, futures and other derivatives on indices that track the share prices of Saudi-listed companies within one account.
History
The Saudi Stock Exchange began trading informally in 1954. The securities market became officially regulated in 1984 and, in 2003, the current regulator for the Saudi Exchange, the Saudi Capital Markets Authority, was formed.
By 2008, only residents of the Gulf Cooperation Council countries could own Saudi equities directly, but in 2015, the Tadawul trading centre was opened to Qualified Foreign Investors (QFI).
In 2017, the Saudi Stock Exchange adopted Nasdaq post-trading technologies. This new system opened the way for more complex products, like derivatives.
In 2019, Saudi Aramco, the largest oil producer in the world, launched its stocks on Tadawul in what was the world’s largest IPO at the time. Foreign issuers were then allowed to be listed on the Saudi Stock Exchange and Tadawul joined the FTSE Global Equity Index Series as a secondary emerging market. Saudi Aramco was the world’s largest listed company until 2020 when it was surpassed by Apple. The company’s listing on the Saudi Stock Exchange combined with more flexible rules for foreign investors has made the Tadawul trading centre one of the most relevant exchanges in the world.
In 2020, Tadawul had a daily average volume traded of 316 million shares and a daily average value of over 8,000 million Saudi Riyals (SAR) via direct trading and through registered brokers. This is also the year that Tadawul launched its derivatives market.
Indices
Tadawul All-Share Index (TASI)
The TASI includes almost all the listed companies on the Saudi Stock Exchange, of which there are over 200, and can be used as a general indicator of its performance. There are 21 industry-related subindices, including the Energy Index, the Transportation Index and the Materials Index.
The only shares excluded from the TASI’s calculation methods are those owned by Saudi government officials, a company’s shares owned by its board of directors and restricted shares. You can follow the performance of this index on the Tadawul official website or sites like TradingView.
MSCI Tadawul 30 Index (MT30)
Launched in 2019, the MT30 index is used as a benchmark of the largest and most liquid companies listed on the Tadawul exchange. It was developed as a basis for derivatives and exchange-traded financial products.
Who Can Trade On The Saudi Stock Exchange?
The Saudi Stock Exchange has strict membership rules and restrictions on who can trade. Nationals and residents of countries in the Gulf Cooperation Council, which include Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates, can own, buy and sell stocks on the Tadawul if they have a Saudi bank account. Investors can also trade derivatives, bonds and exchange-traded funds (ETFs).
Foreign individuals that do not reside in these countries cannot directly trade stocks from Tadawul and therefore will need to use the services of brokers with access to the Tadawul.
Foreign institutions can apply to the Qualified Foreign Investor (QFI) program and trade on the Saudi Stock Exchange. To qualify, a QFI needs to have at least $500 million in assets under management. There are over 1,500 financial institutions with QFI status, including banks, investment funds and brokers. Foreign investors cannot own more than 10% of the shares of a listed company and a maximum of 49% of the shares of a listed company can be owned by QFI, collectively. Read the Tadawul trading and membership rules on its website for more information.
Tadawul clients are arranged into three groups: institutions, covering all institutional and corporate clients, as well as account managers; tier 1 individuals, including those traders that have large portfolios or professional securities experience or qualifications; tier 2 individuals, which covers everyone else.
What Products Are Available On The Saudi Stock Exchange?
- Stocks: Investors can trade stocks of all companies listed on the Saudi Stock Exchange, subject to ownership restrictions for foreign investors.
- Exchange-Traded Funds (ETFs): ETFs are investment funds tracking a particular index or asset group and can be traded on stock exchanges. An ETF following the MT30 Index is available for all investors to trade, with no restrictions for foreign investors.
- Negotiated Trades: With these instruments, a buyer and a seller agree independently on the trade details, including price and amount. There are volume and price minimums to regulate the market. Read the Tadawul Trading and Membership Procedures for more information.
- Derivatives: Recently, the Tadawul exchange launched its first derivatives product, a future that tracks the MT30 Index. The clearinghouse, Muqassa, establishes the minimum percentage margin and the final margin levels depending on the client type, producing a calculated margin multiplier. Institutions have a multiplier of 100%, meaning they only pay the minimum margin; Tier 1 individuals have a multiplier of 133%, and Tier 2 individuals have a multiplier of 200%, so they pay double the minimum margin.
Tadawul Trading Hours
The Saudi Stock Exchange opening hours are 10:00 to 15:00 AST (GMT+3) between Sunday and Thursday. Friday and Saturday are non-trading days. There is also an opening auction session from 09:30 until 10:00 AST, a trade-at-last session from 15:10 to 15:20 AST and a post-trade session from 15:10 until 16:00 AST on trading days. Tadawul’s opening hours are the same during Ramadan.
There are also Tadawul market closures on the National Day of Saudi Arabia (23rd September) and for a few days during the Eid Al-Fitr and Eid Al-Adha holidays. Check the trading calendar on the Saudi Stock Exchange website or via associated Tadawul brokers for more information on when market closures and public holidays will occur.
How Can I Trade On The Saudi Stock Exchange As A Foreign Individual?
If you do not meet the requirements to trade directly in the Saudi Stock Exchange, maybe you are not a national or resident of a Gulf Cooperation Council country, there are still ways to gain exposure to Saudi-listed companies. Foreign Tadawul brokers have developed indices that track the value of shares in the Saudi Stock Exchange and these indices can be traded on global exchanges.
The MSCI Saudi Arabia IMI 25/50 Index (USD) tracks 83 companies from the Tadawul trading centre and ETFs on its value and can be traded in the NYSE Arca Exchange (ticker: KSA) by individual investors from across the globe. The EUREX exchange offers the option to trade MSCI Saudi Arabia Index Futures (FMSA).
Final Word On Tadawul Brokers
For residents of Gulf Cooperation Council countries, the Tadawul exchange offers exciting investment opportunities. Saudi Aramco, the largest oil producer in the world, put the Saudi Stock Exchange on the world map and, even if you are not a Gulf national, there are still ways to gain exposure to the Saudi market via online Tadawul brokers. Keep an eye on the developments of the Tadawul exchange as it plans to release new derivatives and indices. Use our list of top Tadawul brokers to get started with the Saudi Stock Exchange.
FAQs
What Is Tadawul?
The Tadawul, or the Saudi Stock Exchange, is the largest stock exchange in the Middle East and North Africa and one of the biggest in the world. Tadawul had an average daily trading volume of 316 million shares and a value of over 8,000 million Saudi Riyals (SAR) in 2020.
What Stocks Are Available To Be Traded On The Saudi Stock Exchange?
Some of the largest petroleum and natural gas companies in the world are listed on the Tadawul exchange. This includes Saudi Aramco, the largest oil producer in the world. The best Tadawul brokers will provide key financial metrics and company updates within their platforms.
Who Can Trade On The Saudi Stock Exchange?
Nationals and residents in the Gulf Cooperation Council countries with a Saudi bank account can trade directly on the Tadawul exchange. Foreign institutions, including brokers, that meet the Qualified Foreign Investor program requirements can trade, although there are limitations on ownership.
Can I Trade Derivatives At Tadawul Brokers?
Yes – the Tadawul trading centre recently launched a derivatives market. Currently, it offers an index future that tracks the MT30 Index. Foreign investors do not have ownership limits when trading derivatives.
What Are Tadawul Trading Hours?
The Saudi Stock Exchange is open from 10:00 to 15:00 AST, Sunday through Thursday. Out of hours trading is supported from 09:30to 10:00 AST and from 15:10 to 16:00 AST. Tadawul trading hours are the same during Ramadan. Look out for a published calendar on your Tadawul broker’s website.
Can I Trade In The Saudi Stock Exchange From The US?
Individual investors that are neither nationals or residents of the Gulf Cooperation Council countries cannot trade on the Saudi Stock Exchange directly. However, you can have exposure to the Tadawul exchange through registered brokers. Retail traders can invest in ETFs, futures and other derivatives on indices that track the share prices of Saudi-listed companies.