TASI Market Wrap — February 2026: Foreign Access Goes Live, Market Gives Back Ground

February 2026 unfolded as a textbook case of 'buy the rumour, sell the news.' The January rally — which had priced in the entirety of the CMA's foreign investor access reform in an 8.5% surge — left limited upside for the February open. When markets reopened under the new framework on February 1, initial foreign inflows were real but not overwhelming. The index struggled to build on its January closing level of 11,382 and gradually gave ground across the month.
By the week ending February 23, TASI had declined to 10,947.3 — a 304.6-point drop (-2.7%) in that final week alone. Total weekly trading volume hit 1.1 billion shares for a value of SAR 20.2 billion during that period. Healthcare Equipment & Services was the worst-performing sector for the week, declining 6.1%, followed by Consumer Services at -5.4%. The index's market capitalization stood at approximately SAR 9.4 trillion.
The Geopolitical Overlay
Impossible to separate February's market performance from the regional backdrop. The U.S.-Israeli military strikes on Iran, and Iran's subsequent move to restrict traffic through the Strait of Hormuz, created a binary risk event that equity markets struggled to price. On one hand, higher oil prices support Saudi Arabia's fiscal position and Aramco's earnings. On the other, regional instability elevates the risk premium required by international investors for Saudi assets, particularly as the new foreign access framework had just gone live.
TASI fell as much as 2% in early trade on certain sessions as banks tumbled on credit risk concerns tied to regional counterparty exposure. Aramco limited losses given its obvious oil price tailwind, but the narrative of 'higher for longer oil = good for Saudi equities' was complicated by the simultaneous pressure on risk-sensitive sectors including real estate, consumer services, and healthcare.
Notable Movers
Saudi Enaya Cooperative Insurance rose 15.3% in the final week of February — one of the few clear beneficiaries as demand for insurance products surged against a backdrop of geopolitical uncertainty. Dar Alarkan Real Estate Development surged 12.0% in the same week, recovering from an oversold position. On the downside, National Medical Care Co. collapsed 18.8% week-on-week on company-specific earnings concerns, and Naseej International Trading shed 12.2%.
Macro Data Points
Saudi Arabia's inflation rate eased to 1.8% month-on-month in January 2026 — a reading that gave the Saudi Central Bank (SAMA) room to maintain rates or ease further if needed. Banks' investments in government treasury bonds rose to SAR 658.2 billion in February 2026, an increase of approximately 10% versus February 2025, signalling continued sovereign borrowing demand.
March 2026 Outlook
March will be defined by the degree to which geopolitical risk either de-escalates or deepens. The Strait of Hormuz situation remains the single most important variable for Saudi equities — it simultaneously affects oil price dynamics, regional trade flows, and investor sentiment. Technical picture: TASI at 10,947 sits above its December 2025 low of 10,339 and year-long support around 10,200–10,300. A breach of that zone would be a significant bearish signal. Upside catalyst: OPEC+ output decisions, a Q1 earnings season showing banking sector profit growth of 8–12% YoY (as consensus expects), or any diplomatic resolution in the Hormuz situation. Base case: volatile trading in the 10,700–11,200 range.