The Saudi stock market’s Tadawul All-Share Index (TASI) continues to show gains, reflecting an increase of over 40 percent since the start of 2005. For the past six years, the rate of growth has averaged 38 percent. By the end of April 2005, market capitalization stood at over U.S. $435 billion. The World Federation of Stock Exchanges ranks the Saudi equity market at 16th in the world in terms of capitalization and 12th in terms of the value traded.
Economic growth has also been seen in Saudi banks, which are now offering over 200 mutual funds whose assets have been growing at a rate of 14 percent annually. The Capital Markets Authority (CMA), set up in July last year, recently issued regulations governing securities and the licensing of non-bank financial intermediaries, which must provide assurances of safeguards against money laundering.
The growth of the Saudi stock market can be attributed to a number of factors, such as high oil prices, abundant liquidity, and a strong economy; but also confidence in the market, which is a continuous, order-driven market, with up-to-the-minute price, volume and company information dissemination. The Tadawul was one of the first markets in the world to set up a full electronic clearing and settlement system, with immediate transfer of ownership.