Increasing the number of sectors and companies in the financial market is of utmost importance to diversify options for investors and represent the economy so that market movement balances and its attractiveness rises. This has been achieved in the Saudi financial market regarding the main and parallel stock markets (Nomo), but the observed trend is the decline in average traded liquidity for a long period to levels that do not match the market size and value, which exceeds SAR 9.5 trillion for the main market. Any financial market with highly diversified opportunities and hundreds of companies needs a rise in daily traded liquidity; otherwise, it will become 'like a giant jumbo jet body with small car engines,' meaning it will not be able to take off to the deserved level or keep pace with economic activity growth.

Some may respond that the basis is investment and looking at the return rate from dividends of companies compared to alternative opportunities without considering the movement of the company’s stock price or the index value. This view is theoretically logical in terms of investment rules, but it also violates important rules for long-term investment. There is the inflation factor, and it is known that assets are supposed to absorb this to maintain the purchasing power of the amount paid for investment in an asset whose revenues grow, thus its value must rise. That is, someone who invests in a security today with a sum that would allow them to buy another asset, and then the security’s value does not change for several years despite the company’s business growth, when they exit and return to buying assets outside the financial market, they will find that their purchasing power has decreased. There are many examples of changes in prices of real estate, cars, goods, and products rising over time to absorb inflation. The world has been experiencing an inflation crisis for at least two decades, especially after the huge liquidity tsunami pumped into markets through quantitative easing by the US and many major economies after the 2008 global financial crisis, and the continuation of low interest rates near zero for long years deepened and entrenched inflation globally.

Moreover, what distinguishes financial markets from others is the speed of exiting them. If liquidity declines, this becomes difficult, which will lead investors to refrain from it because it has lost one of its most important attractions. Thus, it affects investors’ plans to redistribute positions or go to investments in assets outside the financial market, and the economy loses a part of the dynamism of investment movement speed. In fact, some may be forced to sell at any price to avoid missing the alternative opportunity, which may put downward pressure on the security’s price. Speculation, as they say, is the salt of the market and the main factor for its attractiveness. The decline in liquidity to levels below four billion riyals, equivalent to 0.04% of the total market capitalization of listed companies, is a major challenge to market attractiveness. For example, US markets have a daily trading ratio of approximately 1.5% of the total market value of US markets, which is an ideal ratio making investment and trading attractiveness there the highest globally.

The stock market bottom seems to have become clear, as the index and most stock prices have stabilized for a long period exceeding two years in these current price ranges, but the average liquidity is declining and its bottom is unknown? This requires re-studying the reasons leading to that and removing any obstacles limiting liquidity flow for daily trading in proportion to the huge expansion in the number of opportunities in the market and the major regulatory reforms it has witnessed in recent years that have raised its evaluation level to be among the emerging markets joining the most important global indices and reflecting the development of economic activity and the doubling of its size over the past nine years.