TadawuI’s main market defied regional war jitters in March, as the energy-heavy bourse turned into a geopolitical hedge. Still, smaller stocks and the Nomu parallel market exhibited weaker performance than heavyweights, suggesting investor caution is still high.

TASI closed March up 5.05% at 11.2k points as the Iran war propped up oil prices. Market cap stood at SAR 9.86 tn by the end of the month, anchored by the sheer weight of Aramco (+15%), according to market data. Total trading value hit SAR 103.9 bn across roughly 4.8 bn shares, with flows largely concentrated in blue chips as investors piled into defensive names.

The recovery looks more like a stability-led bounce than a full return of risk appetite, with state-linked institutions stepping in as geopolitical tensions picked up, Christy Achkar, financial market analyst at CFI Financial Group, tells EnterpriseAM. Large local players, including government-related and pension funds, likely supported key blue chips to keep the market anchored, she said.

What gives it away? Weaker performance in smaller stocks and growth markets like Nomu suggests that investors are still cautious and risk appetite has not fully returned, Achkar added. “This type of buying can push the index higher because TASI is heavily weighted toward large banks and energy firms,” he noted, suggesting the rally was a calculated effort to stabilize the market rather than a shift in organic investor behavior.

REFRESHER- The rebound comes after a weak 2025, when the index fell 12.8% — its sharpest drop in a decade — amid softer oil prices and delays across large-scale projects. Heading into 2026, global investors largely stayed on the sidelines, citing limited near-term catalysts, but March’s move suggests positioning is shifting back toward energy and banking heavyweights.

The sector breakdown

Gains were concentrated in materials, petrochemicals, and financials, led by Saleh Alrashed (+52.4%), Petro Rabigh (+44.6%), and Al Rajhi Takaful (+41.9%), with Yansab (+41.6%) and Chemanol (+35.2%) also among the top performers.

Travel-linked and consumer-facing names were hit hardest. Losses were led by Elm (-16.4%), Saico (-16.2%), and AlKhaleej Training (-15.8%), followed by flynas (-14.7%) and Seera (-14.1%), reflecting weaker sentiment toward sectors exposed to discretionary demand and cross-border activity.

TASI stands on its own against regional peers

Most regional markets lagged TASI in March. Egypt’s EGX30 fell 7.9% during the month as foreign investors stepped up selling amid rising regional tensions, while Abu Dhabi’s ADX (-8.9%) and Dubai’s DFM (-16.4%) bore the brunt of the region’s geopolitical unrest, as Dubai’s two growth engines — tourism and real estate — took a hit.

ICYMI- Global strategists are also leaning our way: Morgan Stanley upgraded its outlook forSaudi equities to “overweight” from “equal weight” earlier this month, citing the Kingdom’s positive exposure to higher oil prices, relatively light positioning by global funds, and the stability of the SAR’s peg to the USD. Meanwhile, both the UAE and Egypt were downgraded to “equal weight.”

The parallel market was not so lucky

The NomuC fell 0.92% to 22.7k points in March, confirming the cautious stance of the broader market.

Why? Investors tend to “prioritize stability and liquidity over growth” in uncertain times, Achkar said, adding that money is flowing into TASI’s cashflow-heavy firms while risk appetite for smaller growth stories remains muted because they don’t benefit directly from higher oil prices.

Tags: