Saudi Exchange Launches Tadawul IPO Index

The Saudi Exchange has launched a new index – Tadawul IPO Index – in addition to the existing three indices – Tadawul Large, Tadawul Medium, and Tadawul Small – marking a significant step forward in the development of the Saudi capital market.

These four indices, based on company size and IPO performance, provide investors with a broad range of investment benchmarks while enabling institutions to offer new products to meet growing investor strategies.

The size indices introduced by the Saudi Exchange reflect the market’s composition, with Tadawul Large companies accounting for 70% of the free float market cap, Tadawul Medium-sized companies accounting for 20% of the total free float market capitalisation, and Tadawul Small companies comprising the remaining 10% of the accumulated free float market capitalisation.

These size indices provide investors with benchmarks to broaden their investment strategies and to capitalise on specific market opportunities.

The Tadawul IPO Index will be introduced to track the performance of companies listed on the Main Market within the past five years. This index will provide investors with a benchmark to evaluate the performance of their IPOs and a unique opportunity to invest in new and rapidly growing companies.

Similar to the current Tadawul All Share Index (TASI), the maximum weight of any index constituent will be 15%, ensuring a balanced representation of the entire market. These new indices serve as valuable benchmarks for specific investment products, allowing institutional investors to track the performance and activities of different segments of the market.

Significant Step

In his comments, Mohammed Al Rumaih, CEO of the Saudi Exchange, said that the introduction of the four indices represented a significant step forward in the development of the Saudi capital market.

“By introducing size indices that reflect the market’s composition, we aim to provide a balanced representation of the market and offer investors a diverse range of investment opportunities,” he explained.

Furthermore, the Tadawul IPO Index will enable investors to participate in the growth potential of new and rapidly expanding companies listed on the Main Market. We believe these indices will serve as valuable benchmarks for investment products and will allow both local and foreign investors to access and benefit from our dynamic and growing capital market, Al Rumaih added.

The Tadawul IPO Index measures the performance of recently listed companies on the market. Index value will be calculated based on Free Float Market Capitalisation of the constituents. The Tadawul IPO index is a sub-index of TASI index (parent index).