These indicators are characterized by the following features:

Characteristics of Market Indicators

Comprehensive Market Representation

Indicators consist of a group of major stocks or financial assets in the market, reflecting the overall performance of the market as a whole.

Regular Calculation and Updates

The index value is calculated continuously and regularly (daily or weekly) based on the prices of its constituent stocks.

Benchmarking and Comparison

Indicators serve as a fundamental reference for comparing the performance of different markets and investments.

Tracking and Analysis

Indicators can be used to track market trends, volatility, and long-term movements, helping in making investment decisions.

Market Index Calculation Methods

There are several methods for calculating financial market indices, most notably:

1. Price-Weighted Index

• The index is calculated by taking the arithmetic average of the constituent stock prices
• Example: Dow Jones Industrial Average

2. Market Capitalization-Weighted Index

• Each stock is weighted based on its market value
• Larger companies have a greater impact on the index
• Example: Standard & Poor's 500 Index

3. Volume-Weighted Index

• Each stock is weighted based on its trading volume
• Stocks with higher liquidity have a greater impact
• Example: NASDAQ Composite Index

4. Geometric Mean Index

• The geometric mean of stock prices is calculated instead of the arithmetic mean
• Considered more accurate in measuring long-term investment growth

5. Risk-Adjusted Performance Indices

• Take into account the risks associated with investment
• Examples: Sharpe Index and Alpha Index

Important Note: These different methods of calculating indices lead to different results, so investors should understand the calculation method when using these indices to evaluate their portfolio performance.

Examples of Famous Market Indices

Some of the most prominent global market indices include:

• S&P 500 - US Stocks
• FTSE 100 - British Stocks
• DAX - German Stocks
• Nikkei 225 - Japanese Stocks
• TASI Index - Saudi Stocks

These indices serve as a mirror reflecting the state of financial markets and are essential measurement and tracking tools for investors and analysts.

Overview of the Saudi Stock Market Index

The Saudi stock market index is known as the TASI Index (Tadawul All Share Index).

Historical Background

• The TASI index was launched in 1985 as the main index for the Saudi stock market
• The index consists of the largest 30 companies listed on the Saudi market by market capitalization
• It is considered the main and most famous index for Saudi financial markets

Importance of TASI Index

• The index serves as a key reference for the overall performance of the Saudi market
• It is used by investors and analysts for analysis, comparison, and investment in Saudi stocks
• The index reflects general trends and developments in the Saudi market

Characteristics of TASI Index

• The index value is calculated daily and published regularly
• The index undergoes periodic reviews to ensure good market representation
• TASI index serves as a fundamental reference for investment funds and investment portfolios in Saudi Arabia

In general, the TASI index is a key measurement and tracking tool for the overall performance of Saudi financial markets, receiving significant attention from local and international investors and analysts.

Key Factors Affecting TASI Index Performance

There are several key factors that influence the performance of the TASI index in the Saudi market, most importantly:

1. Economic Performance of Saudi Arabia

• Gross Domestic Product (GDP) growth
• Inflation and unemployment levels
• Government economic and fiscal policies

2. Global Oil Prices

Since Saudi Arabia is a rentier economy that heavily depends on oil revenues, oil price changes directly impact market performance.

3. Political and Security Developments in the Region

Any political or security developments in Saudi Arabia or the Gulf Arab region are reflected in investor confidence and market performance.

4. Policies and Decisions of the Saudi Capital Market Authority

Regulatory procedures or regulatory decisions that affect the market.

5. Performance of Major Listed Companies in the Index

Earnings results and financial announcements of major companies affect the index.

6. Foreign Investment Flows

Increases or decreases in direct and portfolio investment flows affect market performance.

7. External Factors

Global economic conditions and international financial markets, as developments in global markets have an impact on the Saudi market.

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Conclusion: The performance of the TASI index is influenced by a combination of local, regional, and global economic, political, and regulatory factors.