TASI Market Wrap — December 2025: A Year Ends at Three-Year Lows

December 2025 was, in many respects, a tale of two halves — or more precisely, a month that ended better than it began, even if the overall picture remained bleak. The index closed out the year at 10,491 points, capping a 12.8% annual decline from 12,037 at the end of 2024. The loss in point terms — 1,546 points — was the largest since 2008. In percentage terms, the 12.8% drop was the steepest since 2015, when TASI fell 17%.
Trading activity hit its lowest ebb of the year. December's traded value came in at approximately SAR 76 billion — the softest month of 2025 by a considerable margin, well below January's peak of SAR 140.94 billion. The number of executed transactions fell 7% year-on-year across 2025 to 119.03 million for the full year. The market headed south in 135 out of 251 sessions last year. Sellers dominated. The ratio of losers to gainers across all listed names was 205 to 26 — only 26 stocks managed to post a full-year gain in a market of over 200 names.
The CMA Catalyst
What changed the narrative — and set the stage for the January surge — was a January 6th announcement that arrived just days after month-end: the Capital Market Authority confirmed it would open the Saudi stock market to all categories of foreign investors, enabling direct investment from February 1, 2026. The announcement ended the Qualified Foreign Investor (QFI) framework that had for years limited foreign access to Saudi equities through swap agreements that stripped investors of voting rights. This was the structural shift the market had been anticipating since Q3 2025, when Bloomberg reported that a CMA board member said the authority was 'close to approving' such an amendment.
In anticipation, the final sessions of December — and particularly the few trading days straddling the New Year — saw institutional positioning begin to shift. Arbitrage desks started pricing in an inflow of passive foreign capital tied to MSCI reweighting expectations, and banking stocks began to attract accumulation from investors looking ahead to Q1 2026 earnings.
Full-Year Sector Scorecard
For the record: telecoms and IT were the only sectors to finish 2025 in positive territory, up 11%+ year-on-year. Media and entertainment fell 49%. Utilities dropped 47%. Consumer durables shed 35%. Basic materials lost 11%. Banking finished almost flat at −0.1%. Luxury goods retail and distribution lost just 1%, outperforming nearly every other consumer-facing sector. The TASI hit its 2025 high of 12,536 on January 29 and its year-low of 10,339 in December.
January 2026 Outlook
The January setup was the strongest the market had seen in years. The CMA's February 1 open-access date for foreign investors created a hard deadline around which institutional flows would organize. Passive rebalancing tied to index inclusion mechanics, active funds re-entering after year-end redemption cycles, and domestic retail investors chasing the momentum — all three buying streams were set to converge. The technical picture supported the thesis: TASI at 10,491 represented a multi-year low, with the 2022 trough around 10,478 acting as a gravitational support level. Our base case for January was a recovery to 11,000–11,500, with a bull scenario above 11,800 if foreign buying surprised to the upside.