Saudi Capital Market in 2025: A Year of Shifts, Signals, and Strategic Growth
The Saudi capital market went through a year of realignment in 2025. While headlines focused on index declines and slower IPO activity, a closer look reveals a market moving toward maturity where fundamentals are back in focus, and selectivity is replacing momentum.
What Happened to TASI in 2025?
The Tadawul All Share Index (TASI) saw a noticeable decline in 2025, driven by a combination of macroeconomic and market-specific challenges:
A drop in global oil prices
Rising public debt levels
Underperformance of several newly listed companies
According to the Financial Times, the Saudi market ranked among the weakest global performers this year, as investor sentiment turned cautious and liquidity across sectors tightened.
Yet this downturn is not necessarily negative; it may mark the beginning of a more balanced and fundamentals-driven phase for the market.
From Quantity to Quality: How Saudi Investors Shifted Focus in 2025
2025 wasn’t just another year for the Saudi capital market; it was a turning point.
While some market indicators moved downward, something more meaningful was happening beneath the surface: investor behavior was evolving. The market started favoring depth over speed, and fundamentals over hype.
Smarter Investors, Sharper Questions
This year, Saudi investors became more selective. They no longer rushed into every new listing; they asked tougher questions:
Is the company’s performance clear and proven?
Can the business model scale?
Are the growth projections measurable and realistic?
Optimism alone wasn’t enough. With liquidity tightening and trading volumes fluctuating, the market shifted toward a “quality over quantity” mindset. Investors became more focused on solid financials and long-term profitability, rather than short-term buzz.
Private Funding on the Rise
While IPOs require structure and timing, many companies are now looking elsewhere.
In 2024 and 2025, Saudi Arabia saw major growth in venture capital and private equity activity. Both local and global investors are now backing startups and high-growth businesses across the Kingdom.
With this kind of funding available, often with favorable terms, many founders are choosing to raise capital privately. IPOs aren’t off the table, but they’re no longer the first or only option. This mirrors a global trend where companies delay going public in favor of more strategic timing.
Why Do Shares Fall Below the Offer Price After an IPO?
Data shows that a number of recently listed companies have seen share prices fall below their IPO prices.
Examples include:
United Carton Industries: -44%
Arabian Mills: ~-38%
Modern Mills: ~-34%
NiceOne: ~-46.6%
Jahez: ~-64%
This is a clear signal of over-optimistic IPO pricing that failed to hold post-listing. Investors are now more discerning, and the market is adjusting valuations based on actual performance and outlook, not just pre-IPO marketing.
Tighter liquidity and risk aversion have also played a role in post-listing sell-offs, especially in cases where stock momentum was weak after trading began.
Strong Growth, Then a Healthy Correction
Since its launch, the Nomu Parallel Market has become a valuable space for small and medium-sized enterprises (SMEs) to access public capital. From 2017 through the end of 2024, the NomuC index showed significant growth.
At the end of 2023, NomuC closed at 24,529 points
By the end of 2024, it had climbed to 31,476 points, marking a 28% year-on-year gain
However, 2025 brought a natural correction. NomuC declined to around 23,897 points by year-end, a drop of roughly 24% from its 2024 peak. The index fluctuated throughout the year, ranging between 23,684 and 31,816 points.
This movement suggests a recalibration, not a collapse, after nearly seven years of rapid growth.
The Saudi market in 2025 has entered a more mature phase. Market corrections are helping refocus attention on quality, fundamentals, and sustainable growth. While IPO activity has slowed, it's now more selective. The Nomu market still offers strong potential but with higher risk. Investors are shifting from hype to value, signaling a healthier long-term outlook for the market.
