Investing in Saudi Stock Market via KSA ETF

10:43, 12 May 2023

Tadawul All Share Index (TASI)

Although there is a certain enthusiasm about choosing individual stocks listed on the Saudi Stock Exchange (Tadawul) – sometimes it is better to consider an ETF. By doing so, you will often invest in a basket of selected Saudi stocks in a variety of markets and sectors.

With net assets of almost $1B, The iShares MSCI Saudi Arabia ETF (KSA) is the largest international exchange-traded fund that seeks to track the investment results of an index composed primarily of Saudi stocks. 

The fund is suitable for Saudi and foreign investors who want liquid and diversified exposure to a basket of 100+ top companies listed on the Saudi Stock Exchange. 

Why invest in Saudi Stock Market via KSA? 

  1. Liquid and diversified exposure to frontier and emerging market stocks, including Aramco, Al Rajhi, Alahli, SABIC, STC, Maaden, RIYAD, and more. 
  2. Gain access to a virtually untapped investment opportunity starting at as low as $100. 
  3. Open trades in any direction or use leverage to hedge your Saudi stock portfolio. 

Try a Demo 

Investing in Saudi Stock Market via KSA – Key Facts 

Are you looking to invest in the company's shares from a well-established country that is undergoing economic transformation? When the iShares MSCI Saudi Arabia ETF (NYSEARCA: KSA) launched in 2015, investors gained an easy way to access broad exposure to the Saudi stock market. The fund is a market-cap-weighted index that tracks the broad-based index composed of Saudi stocks. The ETF is traded on the NYSE and is an iShares product powered by BlackRock. 


The fund's expense ratio comes in at 0.74%. This is higher than average for both the miscellaneous region category and what investors typically expect from a passive ETF. The ability to easily gain exposure to a country that has historically been inaccessible to foreign investors makes this relatively high management fee more palatable. The Franklin FTSE Saudi Arabia ETF (FLSA) is another option available for foreign investors, offering a respectable expense ratio of 0.39%. However, it is important to note that FLSA has a smaller asset size compared to the alternative. With approximately $5M AUM. 

>> Best ETFs 2023

AUM, Liquidity, and Institutional Adoption 

KSA is approaching $900M in total AUM (assets under management). The fund saw $7M in outflows in 2022, less than 1% of AUM - an impressive feat considering how challenging the year was for the Saudi stock market, US markets, and other capital markets all over the world. 

FactSet Analytics Block Liquidity, a measurement that shows how easy it is to trade a $1M block of a security, rates KSA at a 4 out of 5. The average daily share volume over the last 45 days exceeds 400,000 shares with an average spread of 0.03%. Liquidity should not be a concern. 

Institutional ownership has drastically increased in 2022, almost completely recovering from the 2020 sell-off and a lackluster 2021. According to the latest 13F filings, at least 18 institutional investors hold more than 250,000 shares of KSA. 

KSA Liquidity, and Institutional Adoption


Sector Weights and Market Capitalization 

The financials and materials sectors comprise two-thirds of the fund, followed by modest allocations to energy, communications, healthcare, and consumer staples. 

KSA Sector Weights and Market Capitalization


As of May 2023, KSA has 110 holdings traded on the Saudi Stock Exchange and an average market cap of $23.65B. As such it broadly fits in the large-cap bucket but contains a sizable allocation to small-cap companies, making up over 10% of the fund. 

holdings traded on the Saudi Stock Exchange



KSA does not seek to follow an environmental, social, or governance investment strategy. Morningstar has assigned KSA a single globe, their lowest possible sustainability rating. MSCI rates KSA a 2.4 out of 10 for their ESG quality score. Sustainability-conscious investors should look elsewhere. 

Growth and Valuation Metrics 

Relative to the category and index, KSA boasts a higher sales growth percentage, cash flow growth percentage, and book/value growth percentage. This is at the cost of higher valuation multiples, but with a modest P/E of 13.99, there is still plenty of room for future expansion. 

Growth and Valuation Metrics


Just Another Oil Proxy? 

Many investors view an investment in Saudi Arabia as a proxy for oil. They wouldn't be completely wrong, as oil production is still the dominant driver for the Saudi Arabian economy. However, with Saudi Arabia planning their 2023 budget for a sub-$80 barrel, and the country posting its first budget surplus in over a decade, there is less concern (relative to previous years) of Saudi Arabia having significant issues balancing its budget in 2023. 

A strategic framework to reduce the country's dependence on oil and diversify into other sectors was initiated in 2016. This program, called Vision 2030, created a handful of new government entities that have been developing businesses in service sectors unrelated to oil. The conservative oil price expectation and major efforts underway to create new businesses and diversify the economy away from oil could catapult the Saudi stock market to new all-time highs in 2023. 

Technical analysis 

Viewing KSA through the lens of a technical analyst, there are reasons to be excited about shifting momentum. The relative strength index (RSI) is a popular oscillator used to indicate momentum. The divergence between the RSI and the direction of price action is generally seen as a critical signal that a reversal could be imminent. In the chart below, we can see that during the period between September and December, the price fell to a lower low while the RSI created a higher low. This was a sign that the strength of the downward momentum was waning - further confirmed by rising price action as we entered 2023. 

If the downward trend is indeed weakening and possibly reversing, a price breakout above the declining resistance could be a great reason to enter a longer-term position. 

A confirmed movement above 40 would be a strong reversal signal for the Saudi stock market. 

Technical analysis


Investing in the Saudi stock market via KSA – Key Risks 

There are a few key risks potential investors should consider with respect to KSA. The first is oil dependency, as a collapse in oil prices would likely be detrimental to many underlying holdings. Despite efforts to diversify away from the country's dependency on oil, Saudi Arabia still relies on oil exports for a majority of its government funding. Falling oil prices would lead to a decrease in public spending, which would lead to higher unemployment. Oil exportation is also a major source of foreign currency for the country. Declining oil prices could result in an increase in import costs and lead to inflation. 

>> Oil forecast & price predictions 

Second, there are geopolitical risks as tensions with neighboring countries are difficult to predict, could escalate quickly, and are unique to the region. Saudi Arabia and Iran have a long-standing rivalry, mostly due to political and religious differences. And in the ongoing Yemen conflict, Saudi Arabia is leading a coalition opposing the Houthi rebels, who are aligned with Iran. Also, Saudi Arabia has had numerous disputes with Iraq and Kuwait involving oil production and borders. 

Lastly, there's cyclicality - the sector exposure is overweighted in sectors that tend to be more cyclical in nature. With more than 66% of the portfolio invested in financials and materials, KSA's performance will heavily rely on the economy. KSA is positioned to perform very well during periods of economic growth, but will likely perform poorly if there were to be a recession. 

Saudi Stock Market Portfolio Construction Considerations 

Through Dec. 31, 2022, KSA has generated three-year annualized returns of 9.01% with a three-year standard deviation of 20.92%. These are not particularly attractive historical risk-adjusted returns for the Saudi stock market, and the volatility makes this strategy most useful for a small satellite allocation to most portfolios, not a core holding. 

Investors in the Saudi stock market are always making decisions on where to spend their risk budget, which depends on many factors such as overall risk tolerance, time horizon, and investment objectives. A small sleeve of KSA in a traditional investment portfolio brings unique return potentials via this novel investment. The offensive, cyclical nature of the strategy would pair well with defensive holdings in the Saudi stock market. 

KSA's top holdings in the Saudi stock market  

The iShares MSCI Saudi Arabia ETF seeks to track the investment results of a broad-based index composed of Saudi Arabian equities. As for this moment, the most influential Saudi stocks are: 

Al Rahji Bank 

  • Market Value: 199.84M 
  • Weight: 12.7% 
  • Shares: 5.9M 

Al Rajhi Bank, a top Islamic bank, provides diverse banking services in Saudi Arabia. Its widely held shares (Tadawul:1120) on the Saudi Stock Exchange are favored by investors, making it a top choice in the Saudi Stock Exchange. 

>> Al Rajhi (Tadawul: 1120) Stock Forecast & Price Predictions

Saudi National Bank "Alahli Bank" 

  • Market Value: 87.14M 
  • Weight: 9.29% 
  • Shares: 8.8M 

The Saudi National Bank (SNB), formerly Alahli Bank, is a top Saudi stock. Established in 1953, SNB is a leading financial institution with diverse services. Alahli shares are listed on the Saudi Stock Exchange under the symbol (Tadawul:1180), SNB stocks are favored by domestic and international investors. 

>> Al Alahli (Tadawul: 1180) Stock Forecast & Price Predictions

Saudi Arabian Oil "Aramco" 

  • Market Value: 66.95M 
  • Weight: 7.14% 
  • Shares: 7.01M 

Aramco, a Saudi-based global petroleum and gas company, went public in 2019 with a record-breaking IPO. Listed on the Saudi Stock Exchange under the symbol (Tadawul:2222), it's a top Saudi stock, highly valued worldwide, with diverse investors and inclusion in global indices and ETFs. 

>> Saudi Aramco (Tadawul: 2222) Stock Forecast & Price Predictions 

Saudi Basic Industries "SABIC" 

  • Market Value: 65.04M 
  • Weight: 6.93% 
  • Shares: 2.67M 

SABIC (Tadawul:2010) is among the top Saudi stocks, known for its strong performance, diverse products, and strategic partnerships in the chemical sector. It garners investor interest, featuring in global indices and ETFs like iShares MSCI Saudi Arabic (KSA). 

>> SABIC (Tadawul: 2010) Stock Forecast & Price Predictions

Saudi Telecom "STC" 

  • Market Value: 47.15M 
  • Weight: 5.03% 
  • Shares: 4.01M 

STC (Tadawul:7010) is a top Saudi stock, dominating the telecom industry with its expansion and 5G investments. Widely held by investors, it's listed on the Saudi Stock Exchange and included in global indices and ETFs like iShares MSCI Saudi Arabia (KSA), reflecting its growth prospects. 

>> STC (Tadawul: 7010) Stock Forecast & Price Predictions

Saudi Arabian Mining "Maaden" 

  • Market Value: 39.53M 
  • Weight: 4.22% 
  • Shares: 2.17M 

Ma'aden, a Saudi mining and metals company founded in 1997, leads the industry with its diverse products, innovation, and global operations. Included in indices and ETFs like iShares MSCI Saudi Arabic (KSA), Ma'aden is among the top stocks listed in the Saudi market under the symbol (Tadawul:1211), known for its strategic partnerships and sustainable practices. 

>> Maaden (Tadawul:1211) Stock Forecast & Price Predictions 


  • Market Value: 36.57M 
  • Weight: 3.90% 
  • Shares: 4.28M 

Riyad Bank, a top financial institution in Saudi Arabia, offers diverse banking services. With shares listed on the Saudi Stock Exchange under the symbol (Tadawul:1010), it attracts global investors and is included in indices and ETFs like iShares MSCI Saudi Arabia (KSA). As one of the best Saudi stocks, Riyad Bank is a popular choice for exposure to the Middle Eastern banking sector. 

>> Riyad Bank (Tadawul: 1010) Stock Forecast & Price Predictions 

How to trade the Saudi stock market via KSA - Steps 

In order to start trading the Saudi stock market via KSA, follow the steps below:


1. Sign up with 

No one can trade on the Saudi stock market directly, brokerage firms being the only ones that can offer access to the markets. If you are in the Middle East, choose an authorized company that is in the records of the Abu Dhabi Global Markets. A complete list of these companies can be accessed on the ADGM website 

One of the authorized firms is Key Way Markets Ltd (license no. 190005), which operates one of the leading trading platforms in the world, 

Sign up with

2. Open a trading account 

Once you have chosen the broker, you will need to open an account with it. Opening an account with a brokerage firm is akin to opening a bank account, with many firms offering the possibility of opening an online account. 

With you can open a Trading Account to gain access to 2,100+ leveraged products on shares, commodities, indices, cryptocurrencies, bonds, currency pairs and ETFs, including iShares MSCI Saudi Arabia ETF (KSA).  

You can also open an Invest Account and buy 5.000+ shares with ownerships listed on 10 global stocks exchanges. 

3. Fund your account with money 

Trading on the stock exchange is no longer an activity that only the rich can have access to. Today there are many companies that allow you to start investing with little money. With you can deposit as low as $100 to open an account. 

Once you have funded your account with an amount of money, you will be able to start trading on the stock exchanges. 

4. Inform yourself and understand the financial instruments in which you invest 

Do not confuse stock market investments with gambling. If you treat the stock market as a bet and if you invest in companies or financial instruments that you know almost nothing about, you will most likely lose money. However, if you invest in the Saudi stock market through an investment fund that tracks a stock index like MSCI Saudi Arabia IMI 25/50 Index, in the long term you will have more chances Diversify your portfolio 

5. Choose your timeframe and open your position  

Timeframes are important considerations when you’re deciding how to take a position on stocks.   

Each Japanese candle presents the price action over a specific period, or to use traders’ jargon, a time frame. Most trading platforms’ charting modules allow you to view candles representing time frames ranging anywhere from a minute to a month.   

The trend, meaning the overall price direction, that you’ll see on any chart depends greatly on your time frame. The longer the chart’s time frame, the more established and reliable the key price levels and other support/resistance indicators.   

The 10 timeframes available on our award-winning platform enable a comprehensive detailed analysis of all minor price movements. More than 80 technical indicators and analytical tools, including graphic objects, provide detailed analysis of quote dynamics.  

Should you invest in Saudi Stock Market right now? 

Before you consider investing in the Saudi Stock Market, you'll want to hear this. 

If you're starting on your investing journey (or if you want a sanity check), please read through our how-to-invest in stocks guide. It goes through all the basics, from how to get started to how to determine your personal investing strategy, to how much of your money to invest in stocks. 

Although analysts are bullish on the top Saudi stocks, they might not all be the best choices for investors who don't yet have established and diversified portfolios. Even the most stable companies on this list aren't immune to volatility in their stock prices, especially over short periods. 

For this reason, if you're just getting started, you'll also want to consider a well-diversified option like the iShares MSCI Saudi Arabia ETF (NYSE ARCA: KSA)

Free resources  

Before you start investing in the best stocks for your portfolio, you should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more-informed investment decisions.  

Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for investors who are looking to make a transition to leveraged trading. 


What do you need to be able to trade Saudi shares? 

You will have to open an account on one of the platforms agreed by the Saudi stock exchange. Unfortunately, none of the major global stockbrokers, including, is classified as a Tadawul broker. 

Through such a Tadawul broker you will be able to opt only for individual companies (in which case you will have to follow the evolution of the transactions with shares on the Bucharest Stock Exchange). 

To invest in one of the Bucharest Stock Exchange indexes you need to choose an ETF tracking the index. Unfortunately, there are no major ETFs tracking such indexes. IShares MSCI Saudi Arabia ETF (FM) provides some exposure to the Saudi Stock Market. 

What is the Saudi Stock Exchange? 

The main stock exchange in Saudi Arabia is the Saudi Stock Exchange, usually referred to as Tadawul. It is in charge of facilitating the trade of securities, including stocks, bonds, and other financial instruments. It is the biggest stock market in the Middle East. The Saudi Stock Exchange is crucial to the country's capital market since it offers a venue for investors to buy and sell securities. It is regulated by the Capital Market Authority (CMA) and operates on an electronic trading system. 

What can be traded on the Saudi Stock Exchange? 

The Saudi Stock Exchange, also known as Tadawul, facilitates the trading of various securities. The primary types of securities traded on the exchange include: 

  • Stocks: Shares of publicly listed companies in Saudi Arabia can be bought and sold on the exchange. These stocks represent ownership in the company and provide investors with the opportunity to participate in its growth and profit-sharing. 
  • Bonds: Fixed-income securities such as government bonds and corporate bonds can be traded on the Saudi Stock Exchange. These bonds represent loans made by investors to the issuer, and they pay periodic interest until the bond's maturity. 
  • Exchange-Traded Funds (ETFs): ETFs are investment funds that trade on the stock exchange like individual stocks. They can track various indices, sectors, or asset classes, allowing investors to gain exposure to a diversified portfolio of securities through a single investment. 
  • Real Estate Investment Trusts (REITs): REITs are investment vehicles that own and operate income-generating real estate properties. They provide investors with the opportunity to invest in real estate assets without directly owning the properties. 
  • Mutual Funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of securities. Some mutual funds are listed on the Saudi Stock Exchange, allowing investors to buy and sell shares of the fund. 

These are the main types of securities that can be traded on the Saudi Stock Exchange, providing investors with a range of investment options. 

How companies can be listed on the Saudi Stock Exchange? 

To be listed on the regulated market, companies must meet several conditions prior to submitting the application for participation, including: 

Be joint-stock companies, active for at least 3 years, and be able to make available the tax reports from that period 

Have a value of equity/anticipated capitalization of at least EUR 1 million 

The free float (the shares that are not owned by the company or strategic investors) must be at least 25% 

Which are the most popular stocks traded on the Saudi Stock Market? 

The Saudi Stock Market, also known as Tadawul, features several popular stocks that attract significant trading activity. The following five companies listed on the Saudi Stock Exchange are the most famous and traded: 

  • Saudi Arabian Oil Company (Aramco): Aramco is a globally renowned petroleum and gas company and is one of the largest companies in terms of market capitalization. It went public in 2019 with the largest initial public offering (IPO) in history. 
  • Saudi Basic Industries Corporation (SABIC): SABIC is a prominent chemical manufacturing company and is one of the largest publicly listed companies in Saudi Arabia. It operates in various segments, including chemicals, polymers, fertilizers, and metals. 
  • Al Rajhi Bank: Al Rajhi Bank is one of the largest Islamic banks globally, offering a comprehensive range of banking and investment services. It is well-regarded in the financial industry and is known for its strong performance and customer base. 
  • The Saudi National Bank (SNB): Formerly known as Alahli Bank, SNB is a leading financial institution offering diverse banking services. It has a long history in the banking sector and is widely recognized for its presence and customer base in Saudi Arabia. 
  • Riyad Bank: Riyad Bank is a prominent financial institution offering a range of banking services to individuals and businesses. It has a strong presence in Saudi Arabia and is considered one of the major banks in the country. 

It's important to note that popularity can change over time based on market conditions and investor sentiment. It's advisable to conduct thorough research and analysis before making any investment decisions. 

What are the main indices of the Saudi Stock Market? 

The main indices of the Saudi Stock Market, also known as Tadawul, include the Tadawul All Share Index (TASI), the Tadawul 30 Index (TASI30), and the Tadawul Small and Medium Cap Index (TSMC). These indices represent the performance of different segments of the Saudi Stock Market and are widely followed by investors and market participants. 

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